Tesla cuts contractors from the closed plants in California and Nevada.

Reuters reports after CNBC that Tesla cut contractors from the Tesla Factory in Fremont, California and the Tesla Gigafactory in Nevada, which both suspended production in late March (see details here and here). There is no word about the Tesla Gigafactory 2 in New York, which also suspended production.

The unofficial report says "hundreds of workers", which probably means that Tesla is trying to limit costs, starting with the external workforce. That's not surprising if there plan for restarting production soon.

"“It is with my deepest regret that I must inform you that the Tesla factory shutdown has been extended due to the COVID-19 pandemic, and as a result, Tesla has requested to end all contract assignments effective immediately,” Balance Staffing, a workforce management company, said in a memo sighted by CNBC."

Balance Staffing is reportedly not the only work agency that received the request to end all contracts.

"Balance Staffing told workers they would stay on the agency’s books and could find other work via their business, according to the report, which added that contractors hired with other temp agencies had received similar notices."

We assume that Tesla is doing everything possible in the current challenging situation, but some defensive moves are inevitable.

Basically, only the essential activities at the sites and remote work are allowed. Some resources probably were redirected to speed up the Chinese Tesla Gigafactory 3, and some to provide support for the U.S. (logistics and production of medical equipment).

Hopefully, Tesla will come out of the crisis unscathed. The company delivered 367,656 cars in 2019, and 88,400 in Q1 2020.

Having the Chinese plant running at full speed (150,000 cars per year) is now one of the most important factors for the company because China shows signs of recovery from COVID-19.

Source: Reuters