Elon Musk to cut 10% of Tesla jobs due to ‘bad feeling’ about economy

WHAT YOU NEED TO KNOW:

• Elon Musk sent an email to Tesla executives to cut about 10% of jobs at the company due to a “super bad feeling” about the economy.
• Tesla hired nearly 100,000 people at the company and its subsidiaries at the end of 2021.
• Musk has previously warned about the risk of a recession.

Elon Musk wants to cut up to 10% of staff at Tesla due to a “super bad feeling” he has about the state of the economy in the U.S., according to an internal email seen by Reuters.

Currently, Tesla has about 100,000 employees and there are about 5,000 job openings advertised worldwide. In an email sent to Tesla executives on Thursday, the subject line was “pause all hiring worldwide.” It comes days after Musk ordered all Tesla employees to show up at the office for at least 40 hours a week or resign.

The news affected Tesla’s stock as it went down 3% hours after the news.

The demand for Tesla cars and other electric vehicles has not waned. The Guardian reported that the usual indicators of a downturn – including increasing dealer inventories and incentives in the US – have not materialized.

Tesla’s stock has been hammered and fallen 22% since Musk used his shares to acquire Twitter. The negotiation now appears to have stalled. Adding to Tesla’s falling share price are anxiety about the global economy and the effect of China’s Covid-19 lockdown in Shanghai, where Tesla has a factory.

Some said that the billionaire’s order to return to the office was a below-the-table effort to cut staffing levels. According to The Guardian, Tesla staff posted on message boards that their offices are cramped with full-time employees after the company’s rapid expansion during the pandemic. The office apparently doesn’t have the physical capacity to accommodate everyone with staff even asking for advice on whether they should ignore the command or go in and work from the stairwell.

“The more senior you are, the more visible must be your presence,” said Musk in the return-to-the-office email. “That is why I lived in the factory so much – so that those on the line could see me working alongside them. If I had not done that, Tesla would long ago have gone bankrupt.”

Source: The Guardian