BUFFALO, N.Y. — Tesla plans to lay off 10% of its global workforce.
According to multiple national media reports, CEO Elon Musk detailed the plans in an internal memo sent to employees over the weekend.
A 10% reduction would eliminate roughly 14,000 jobs from the company worldwide but it is unclear what the number will be at the Buffalo factory. According to the company’s last report with the state, there were about 1,800 jobs there at the end of last year.
New York spent nearly $1 billion to build the RiverBend complex and purchase equipment for Tesla, its primary tenant. In return, the company agreed to reach employment benchmarks or pay penalties back to New York.
The state said at this time, Tesla has met or exceeded all of its obligations and is a major contributor to the regional economy. The gigafactory told the state it’s too soon to know the potential impact on workforce reductions or staffing in Buffalo.
In the memo, Musk said layoffs are necessary in order to be ready for growth in its next cycle but New York state Assemblymember Pat Burke, who represents the South Buffalo district, says it’s difficult to spin as a good thing.
“It’s certainly concerning every time there’s layoffs,” Burke said. “Layoffs happen but you have to be considerate of what it does to families, the anxiety it causes and the economic insecurity it causes. From what’s being reported, it says they’re not going against their commitments, so they’ve gone beyond their commitments which is a good sign and we’ll see how it goes.”
Burke said he disagrees with the level to which the state has subsidized the facility in general. According to the most recent report to the state, Tesla should remain well within its employment obligations even if it cuts 10%, roughly 180 positions in Buffalo.
In a statement, a spokesperson for the state’s economic development agency said, “Empire State Development is monitoring the situation and will work closely with our partners at the New York State Development of Labor to ensure that any impacted workers in New York receive resources and assistance.”
Aside from the company’s polarizing CEO, the Buffalo project has faced criticism for years as its production goals and the products made there have changed over and simply as the center of the much-maligned Buffalo Billion initiative. The company did not respond to our request for information or a statement.