U.S. government steps up efforts to help laid-off Tesla employees

The U.S. Department of Labor has awarded more than $1 million to the state of Texas to help employees affected by the massive layoffs at Tesla’s Austin Gigafactory, following a WARN notice the department issued in April disclosing that the automaker would cut 2,688 jobs.

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The government said the funds will be used to provide employment and training services to affected workers. The Department of Labor also noted that the funds “enable the state to provide retraining and skills development to displaced workers in Bastrop, Blanco, Burnet, Caldwell, Fayette, Hays, Lee, Llano, Travis and Williamson counties.”

More: Tesla to cut nearly 2,700 jobs in Texas

The award is being called the “first increase” in state benefits for unemployed workers. More funds are available, and the total could eventually increase to $3,230,050.

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The layoffs come after Tesla’s first-quarter deliveries disappointed, falling to 386,810 vehicles. That’s a significant drop from the 422,875 deliveries it posted in the first quarter of 2023.

Disappointing results forced the automaker to take drastic measures, with an internal memo revealing that they were cutting more than 10% of their workforce. At the time, CNBC noted that 2,266 employees in Fremont, California were also being laid off, with smaller layoffs also taking place at multiple other plants.

Today, Tesla still faces significant headwinds. Second-quarter deliveries fell from 466,140 in 2023 to 443,956 this year due to what the company cited as a “difficult operating environment.”

That being said, Tesla achieved “record quarterly revenue” and “vehicle deliveries rebounded sequentially as overall consumer sentiment improved.” However, the average selling price of S3XY vehicles fell as deliveries fell.

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