Elon Musk: Tesla to cut overall workforce by 3.5%, and the company is sued by former employee

Tesla will reduce its salaried workforce by 10 percent a year over the next three months while increasing the number of hourly workers, Musk said Tuesday at an event hosted by Bloomberg.

A Reuters report earlier this month said Musk wants to cut 10% jobs, citing an internal email as evidence. Musk reportedly said in the memo that he has a “super bad feeling” about the current economic situation.

But in a follow-up email Musk wrote to Tesla employees obtained by CNBC, he clarified that the company would reduce the number of salaried annual workers by 10 percent and increase the number of hourly workers.

That means this layoff at Tesla will affect 3.5 % of its total workforce, Musk said on Tuesday. He added that salaried workers account for about two-thirds of Tesla’s total workforce.

Musk said, “A year from now, I think our head count will be higher in both salaried and obviously in hourly,”

Nonetheless, on Sunday, two former Tesla employees filed a lawsuit against the company, claiming it violated U.S. federal laws regarding “mass layoffs”.

Under the U.S. Worker Adjustment and Retraining Notification Act, employers must give 60 days’ notice of mass layoffs or plant closures.

Musk, the world’s richest man, denied the importance of the lawsuit on Tuesday, calling it “baseless. He said, “That is a small lawsuit of minor consequence. Anything that relates to Tesla gets big headlines, whether it is a bicycle accident or something much more serious.”