Tesla Layoffs: Severance Pay for Employees

Tesla is an American automotive and clean energy company. Launched as Tesla Motors in 2003, it has expanded to design and manufacture electric vehicles (EVs), batteries for home and grid-scale use, as well as solar panels and solar roof tiles.

Based in Austin, Texas, Tesla employs more than 120,000 workers in over 600 locations around the world — including Canada. Its subsidiaries include Tesla Energy, DeepScale, and Tesla Grohmann Automation.

In 2004, Elon Musk became Tesla’s largest shareholder with a $6.5 million investment. He was named CEO in 2008, and through the value of the automaker has become on of the world’s wealthiest billionaires. In 2012, Tesla opened its first Canadian store in Toronto. The automaker boasts over 1,200 in Canada, who work out 25 retail and service locations, as well as two manufacturing facilities.

Tesla Layoffs: Severance pay facts

Employees at Tesla are entitled to up to 24 months of severance pay when laid off or terminated without cause, whether full-time, part-time, or hourly. Independent contractors may also qualify for severance if they have been misclassified.

Key Severance Facts

• Severance Pay: Can reach up to 24 months’ pay, based on factors like position, tenure, age, and ability to find similar work. Learn more about severance pay, and explore resources that explain how it works in Ontario, Alberta, and B.C.
• What’s Included: In addition to salary, severance may cover bonuses, commissions, and other compensation.
• Deadlines: You have up to two years from termination to pursue severance, regardless of any employer-imposed deadlines, which are not legally enforceable.
• Better Packages: We have successfully secured much larger amounts for individuals employed across a variety of positions, from entry-level jobs to executives.

Layoffs at Tesla, like any other Canadian employer, must comply with employment laws. Generally speaking, employees are entitled to severance packages if they are laid off, even during corporate restructuring or business closures.

Your rights when facing a layoff

• Notice of Termination: Your employer must provide advance notice or pay in lieu of notice.
• Severance Pay: Compensation depends on your age, position, length of service, and ability to find similar work.
• Wrongful Dismissal: If your employer doesn’t meet its obligations, you have grounds for a wrongful dismissal claim.
• Temporary Layoffs: Even a temporary pause in your work can result in a severance package through a constructive dismissal claim.

Employer tactics to watch for

In Canada, employers may employ certain strategies during layoffs to minimize their obligations:

• Pressuring Employees to Sign Quickly: Avoid signing agreements under pressure. Employer deadlines for severance acceptance are not legally binding.
• Misclassification of Roles: Many independent contractors are actually employees entitled to severance.
• Leaving Out Bonuses and Other Compensation: Ensure severance includes all entitlements, such as commissions or accrued bonuses.

How is severance pay calculated for Tesla employees?

Generally speaking, severance pay is meant to bridge the gap between jobs, offering financial stability as you transition. It’s based on several factors:

• Length of Service: Longer tenure often means higher severance.
• Age: Older employees may be entitled to more due to challenges in finding comparable work.
• Position: Senior roles or specialized positions may attract higher compensation.
• Availability of Similar Work: If your skills are in a niche market, severance may increase.
• Employment Contract: A termination clause in your employment agreement may attempt to limit your severance, but these are often unenforceable.

Many employees mistakenly believe they are only entitled to the minimum ESA amounts. In reality, you may be owed up to 24 months’ pay. Use our Severance Pay Calculator to get a quick estimate.

To learn more about how severance works in Canada, watch this quick primer featuring employment lawyer Lior Samfiru:

Tesla Layoffs: Timeline and analysis

Below is a timeline of recent layoffs at Tesla:

• May 2024: Tesla is reportedly trimming various segments of the company, including software, services, and engineering.
• April 2024: Tesla is reportedly planning to lay off senior executives and the majority of its Supercharging team.
• April 2024: Tesla is eliminating more than 10 per cent of its global workforce as it navigates a slowdown in sales and an ongoing EV price war.
• February 2024: Tesla has reportedly asked managers to highlight which jobs are “critical” — stoking layoff fears among staff.
• June 2022: Elon Musk announced that 10% of the company’s salaried workers were being fired, which could represent as many as 10,000 people.
• June 2018:Tesla fired 9% of its global workforce as a result of organizational restructuring. The cuts largely concerned salaried roles and spared production associates working on its Model 3 vehicle. Employees at the company were informed of the layoff through an email.
• October 2017: As many as 700 Tesla employees were let go, representing 1% of its total workforce. While the company says the cuts are performance related, employees reported that the layoffs were in fact a cost-cutting measure. Many firings occurred without warning, and some workers claim that false performance reviews were “rewritten” by upper management.

Steps to take if you’ve been laid off

If you’ve been affected by Tesla layoffs, here’s what you need to do:

1. Don’t Sign Anything Right Away: Avoid signing severance agreements until you’ve reviewed them with an employment lawyer at Samfiru Tumarkin LLP.
2. Understand Your Entitlements: Use our Severance Pay Calculator to determine what you’re owed.
3. Speak to an Employment Lawyer: Contact us for a consultation to review your severance package.
4. Document Everything: Keep records of termination notices, severance offers, and communication with HR.

Why choose Samfiru Tumarkin LLP?

Unlike firms that rely heavily on courtroom victories, our proven strategy focuses on maximizing severance packages early in the claim process, helping clients avoid the time, cost, and stress of litigation. With extensive courtroom experience to fall back when necessary, we excel at securing generous severance outcomes quickly and efficiently for our clients.

By prioritizing resolution and client-focused strategies, we’ve successfully helped thousands of non-unionized employees navigate layoffs and terminations with confidence.

Resources for Tesla employees

• Severance for provincially regulated employees
• Severance pay by company
• Severance packages in mass layoffs

If you’re a Tesla employee facing layoffs, you don’t have to navigate this challenging time alone. Our experienced employment lawyers in Ontario, Alberta, and B.C. are ready to stand by your side, protect your rights, and secure the severance and compensation you’re owed. Beyond employment law, Samfiru Tumarkin LLP also offers expert guidance in disability claims and personal injury cases, ensuring comprehensive support for all your legal needs.

As a non-unionized employee, you deserve clear advice and effective solutions for your employment issues. Contact us today or call 1-855-821-5900 for a consultation and take the first step toward the compensation you deserve.

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and should not be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.