San Francisco, June 2 (Reuters) – Tesla (TSLA.O) CEO Elon Musk said in an email to executives he saw at Reuters that he had a “very bad feeling” about the economy and wanted to cut about 10% of jobs in electric car makers.
The news came two days after the world’s richest employees were told to return to work or leave the company. read more
Tesla will employ about 100,000 people in the company and its subsidiaries by the end of 2021, according to its annual SEC filing.
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The company was not immediately available for comment.
Musk’s blatant warning of a possible recession and a knock-on effect on automakers is the most direct and high-quality forecast in the industry.
As concerns about the risk of a recession increase, demand for Tesla cars and other electric vehicles remains strong, and many traditional indicators of the downturn – including rising dealer inventory in the United States – remain inactive.
But Tesla struggled to restart production at its Shanghai plant after COVID-19 locks forced costly malfunctions at the plant.
Musk’s dark vision echoes recent comments from executives, including JPMorgan Chase & Co. (JPMN) CEO Jamie Dimon and Goldman Sachs President John Waltron.
“There’s a hurricane in our path,” Timon said this week. read more
Inflation in the United States has been at a 40-year high and has caused a rise in the cost of living for Americans, while the Federal Reserve faces the daunting task of reducing enough to control inflation without causing a recession.
‘Stop all hiring’
Prior to Musk’s warning in an email titled “Stop hiring worldwide,” Tesla had about 5,000 job posts on LinkedIn for sales in Tokyo and for engineers at its new Berlin Gigafactory and in-depth learning scientists at Palo Alto.
Musk’s demand for staff to return to office has already met with backlash in Germany. read more
“Everyone at Tesla has to spend at least 40 hours a week in the office,” Musk wrote in his Tuesday email. “If you do not come, we will assume that you have resigned.”
Musk was involved in a Twitter feud on Thursday with Australian tech billionaire and Atlasian PLC. (TEAM.O) Co-founder Scott Farquhar mocked the order in a series of tweets saying it was “like it was in the 1950s”. read more
Musk tweeted: “Recessions play a key role in economic reform” in response to Farquhar’s tweet encouraging Tesla employees to look into its remote working conditions.
At the end of May, when asked by a Twitter user if the economy was approaching a recession, Musk said, “Yes, but it’s really a good thing. It’s been raining money on idiots for a long time.
Jason Stommel, founder of Tech Talent Agency Cadre, said: “I think this is a disguised layoff, which means they can eliminate depreciation or not actually lay off.”
“(Kasturi) knows that the percentage of workers is not going to come back,” he said, adding that it would be cheaper because there was no need for a cut.
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Editing by Honshu Jin, edited by John Stone Street and Mark Potter
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