June 26, 2022

MediaBizNet

Complete Australian News World

Exclusively, feeling 'very bad' about the economy, Musk wants to cut 10% of Tesla jobs

Exclusively, feeling ‘very bad’ about the economy, Musk wants to cut 10% of Tesla jobs

  • Tesla employed about 100,000 people at the end of 2021
  • Musk warned employees on Tuesday to return to their jobs or leave
  • US executives appear increasingly pessimistic about the economy

SAN FRANCISCO, June 2 (Reuters) – TESLA (TSLA.O) Elon Musk, CEO, said he has a “very bad feeling” about the economy and wants to cut about 10% of jobs at the electric car maker, he said in an email to executives seen by Reuters.

The message came two days after the world’s richest man asked employees to return to the workplace or leave the company. Read more

Tesla employed about 100,000 people at the company and its subsidiaries at the end of 2021, according to its annual SEC filing.

Register now to get free unlimited access to Reuters.com

The company was not immediately available for comment.

Musk’s stark warning of a potential recession and a knock-on effect for automakers is the most direct and best-known forecast of its kind in the industry.

While concerns about recession risks grew, demand for Tesla cars and other electric vehicles remained strong and many traditional indicators of deflation – including an increase in US dealer inventories – did not materialize.

But Tesla has struggled to restart production at its Shanghai plant after the COVID-19 shutdown led to a costly factory outage.

Musk’s bleak outlook reflects recent comments from executives including JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon and Goldman Sachs President John Waldron.

“There’s a hurricane on the road coming our way,” Damon said this week. Read more

READ  Elon Musk says Twitter's legal team told him he violated a non-disclosure agreement

Inflation in the United States is hovering at its highest levels in 40 years and causing a jump in the cost of living for Americans, while the Federal Reserve faces the difficult task of curbing demand enough to curb inflation while not causing a recession.

“stop all hiring”

Prior to Musk’s warning, which came in an email titled “Pause all hiring worldwide,” Tesla had about 5,000 jobs posted on LinkedIn from sales in Tokyo and engineers at its giant new Berlin factory for deep learning scientists in Palo Alto.

Musk’s demand for employees to return to the office has run into obstacles in Germany. Read more

“Everyone at Tesla is required to spend at least 40 hours in the office per week,” Musk wrote in his Tuesday email. “If you don’t show up, we’ll assume you quit.”

On Thursday, Musk also became embroiled in a Twitter spat with the Australian tech billionaire and Atlassian Plc (Team O) Co-founder Scott Farquhar, who mocked the directive in a series of tweets calling it “like something from the 1950s”. Read more

“The recession serves a vital economic cleansing function,” Musk tweeted in response to a tweet from Farquhar encouraging Tesla employees to consider remote work jobs.

In late May, when asked by a Twitter user if the economy was nearing a recession, Musk said, “Yes, but that’s actually a good thing. He’s been spending on fools for far too long. Some bankruptcies have to happen.”

“I think there’s a chance that this is just disguised layoffs, which means they are able to get rid of burnout people, or without actually having to lay off workers,” said Jason Stummel, founder of tech talent agency Cadre.

READ  Netflix lays off 300 employees in second round of job cuts | Netflix

“(Musque) knows there’s a percentage of workers who won’t come back,” which he said would be cheaper because there would be no need for terminations.

Register now to get free unlimited access to Reuters.com

(Reporting by Hyunjo Jin Editing) By John Stonestreet and Mark Potter

Our criteria: Thomson Reuters Trust Principles.