Exclusive: Elon Musk wants to cut 10% on Tesla jobs

  • Tesla will employ about 100,000 people by the end of 2021
  • Musk warned employees Tuesday to return to the office or leave
  • U.S. executives are increasingly sounding dark about the economy

San Francisco, June 3 (Reuters) – Tesla (TSLA.O) CEO Elon Musk has a “very bad feeling” about the economy and told executives he saw in Reuters in an email that the electric car maker should cut jobs by 10%.

The message, sent out on Thursday, came two days after the millionaire told employees to return or leave the workplace under the headline “Stop hiring all over the world,” and raised growing warnings from business leaders about the risks of a recession.

Its annual SEC filing shows that by the end of 2021 Tesla and its subsidiaries will have hired nearly 100,000 people.

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The company was not immediately available for comment.

Shares of Tesla fell nearly 3% in pre-US trading on Friday and its Frankfurt-listed share fell 3.6% after a Reuters report. The US Nasdaq futures turned negative and traded down 0.6%.

Musk has warned of the dangers of a recession in recent weeks, but the email of the hiring freeze and the order to lay off staff is a very direct and high-quality message from the head of an automaker.

So far, demand for Tesla cars and other electric vehicles (EVs) has been strong, and many traditional indicators of decline – including rising dealer inventory and incentives in the United States – have not worked.

But after COVID-19 locks forced costly malfunctions, Tesla struggled to restart production at its Shanghai plant.

“Muskin’s bad mood is shared by many,” said Carsten Preski, the global head of macroeconomic research at the Dutch bank ING. We expect the global economy to cool by the end of this year. The United States is cold, and China and Europe are not going back. “

Musk’s dark vision echoes recent comments from executives, including JPMorgan Chase & Co CEO Jamie Dimon and Goldman Sachs chairman 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.

Musk, the world’s richest man, according to Forbes, did not elaborate on the reasons for his “worst feeling” about the economic outlook in a brief email to Reuters.

It was not immediately clear what impact Musk’s vision would have on the $ 44 billion bid for Twitter. (TWTR.N).

Many analysts have recently lowered price targets for Tesla, which has forecast lost production at its Shanghai plant, which is the hub for supplying and exporting EVs to China.

China will account for a third of Tesla’s global distributions by 2021, according to company data and sales data there. As of Thursday, Daiwa Capital Markets estimates that Tesla has about 32,000 orders awaiting delivery in China, compared to 600,000 vehicles for BYD. (002594.SZ)Its biggest EV competitor in that market.

Whitebush Securities analyst Daniel Yves said in a tweet that Musk and Tesla were “trying to stay ahead of the slow delivery ramp this year and protect the margins ahead of the recession.”

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‘Stop all hiring’

Prior to Musk’s warning, Tesla had about 5,000 job posts on the LinkedIn from sales in Tokyo and engineers at its new Berlin Gigafactory to in-depth learning scientists at Palo Alto. It had planned an online hiring event for Shanghai on June 9 on its WeChat channel.

Musk’s demand for staff to return to office has already met with backlash in Germany. Read more

“You can not just lay off Dutch workers,” said Hans Walti, an FNV union spokesman.

In a Tuesday email, Musk said Tesla employees must be in the office at least 40 hours a week and close the door on any remote work. If you do not come, we will assume that you have resigned, he said.

Musk has repeatedly mentioned the risk of recession in recent comments.

Speaking at a televised conference in mid-May on Miami Beach, he said: “We’ll probably have a recession and that recession will get worse.”

At the end of May, when asked on Twitter if the recession would come, Musk said: “Yes, but it’s really a good thing. It’s been raining money on idiots for a long time.

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Other companies are cutting back on jobs or slowing down or suspending hiring due to declining demand.

Last month, Netflix (NFLX.O) It has laid off about 150 people, mostly in the United States, and Below said it would cut 2,800 jobs in February. Meta platforms (FB.O)Uber (UBER.N) And other technology companies have slowed hiring. read more

In June 2018, Tesla announced a 9% reduction in its workforce, while the loss-making company struggled to increase emissions of Model 3 electric sedans, although it did show data cuts in its SEC filings. .

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Additional Report by John O’Donnell, Jo-Min Park and Joey Jong Editing John Stone Street and Mark Potter by Hoon Joo Jin Report

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