EXCLUSIVE: Tesla layoffs hit Korea, putting Supercharger projects on hold

Industry

Published: 20 May. 2024, 07:00 Updated: 20 May. 2024, 07:13

EXCLUSIVE: Tesla layoffs hit Korea, putting Supercharger projects on hold

Tesla CEO Elon Musk waves as he leaves the Tesla Gigafactory in Berlin on March 13. [AP/YONHAP]

Tesla is pushing to slim down its workforce in Korea in line with its massive global layoff announcement last month as electric car demand slows.

The electric vehicle behemoth is offering voluntary resignations — one of the most common form of job cuts in the country, which imposes strict legal guidelines on layoffs — to salaried employees in Korea.

“Tesla Korea recently sent an email to all of its employees asking them to resign voluntarily, proposing two special severance packages that offer up to two months’ salary additionally to their basic severance pay,” said a source with knowledge of the matter.

A charging team has already been disbanded in Korea following Tesla CEO Elon Musk’s recent announcement of the dissolution of the company's Supercharger division.

Tesla Korea has no open positions listed on JobKorea, one of the most popular online job recruitment sites in Korea. [SCREEN CAPTURE]

Established in December 2015, Tesla currently has around 480 employees in Korea, according to data from the Financial Supervisory Service's electronic disclosure.

The news indicates that the company aims to steeply reduce its employees. Voluntary resignation is normally offered to employees at a certain threshold, largely for older staffers who have been with their company more than 10 years.

In this case, the options are only available to staff who applied for voluntary resignation prior to May 16, though the application will be open until May 22, the source added.

Those who apply for the packages between May 17 and 22 can receive a month of salary on top of their basic severance pay.

Currently, Tesla Korea offers severance packages equaling up to four months' salary for workers who have worked for five years or longer. Workers employed for fewer than five years are eligible for three months’ salary while those with a tenure shorter than one year can receive a month's salary.

Those who apply for voluntary resignation before May 16 are offered two options. One offers an extra two months’ salary in addition to four months' base severance, but requires the employees to quit on June 30.

The other option offers a month's salary and a month of paid vacation starting on June 30 and requires resignation on July 31.

Some contract workers and students of Tesla's apprenticeship program will likely see their contracts canceled soon, another source said.

“Some teams have already dissolved, including the charging team,” the source said. “Remaining staff are so on edge, full of anxiety about their whereabouts.”

In fact, Tesla Korea does not currently have any open positions posted on job recruitment sites like JobKorea and Saramin.

The company declined to comment on the matter.

A Tesla Model X and Y are displayed at Tesla's store in Sinsa-dong, southern Seoul. [TESLA KOREA]

In April, Musk announced that Tesla planned to lay off more than 10 percent of its global workforce, or about 14,000 people, in a company-wide email as part of cost-cutting measures.

Tesla’s slashing of staff and disbandment of the Supercharger team is expected to hit the company's Korean workforce hard.

Tesla Korea has reportedly scrapped its plan to install Superchargers in Sokcho, Gangwon, breaking a contract it signed with the city government last June.

The automaker currently has 160 Superchargers across Korea.

Tesla delivered a total of 386,810 units globally in the first quarter, down 8.5 percent on year, marking the first on-year quarterly fall in deliveries in four years.

The firm has been carrying out a series of price cuts for its vehicles in global markets including those of Korea, the United States and China. In Korea, it cut the prices of its Model Y by some 20 million won last year, backed by cheaper Chinese batteries.

Last year, Stellantis also offered voluntary resignation packages to salaried employees in Korea as part of efforts to tackle weakening business in the domestic market, though a specific number of job reductions has not been disclosed.

The auto layoff contagion will likely spread in Korea. General Motors recently issued layoff notices to 1,000 workers at its plant in Detroit and announced 400 more job cuts at a factory in Michigan.

Stellantis fired 400 white-collar workers during a mandatory remote workday while EV maker Polestar said it would cut 15 percent of its workforce globally.

BY SARAH CHEA [chea.sarah@joongang.co.kr]