Tesla Inc CEO Elon Musk has a “super bad feeling” about the economy and wants to cut about 10 percent of jobs at the electric automaker, he said in an e-mail to executives on Thursday seen by Reuters.
The message came two days after the world’s richest man told employees to return to the workplace or leave the company.
Tesla employed about 100,000 people at the end of last year, its annual filing to the US Securities and Exchange Commission showed.
Photo: AP
In an e-mail with the subject “Pause all hiring worldwide,” Musk said he had a “super bad feeling” about the economy.
Musk on Tuesday told staff to return to the workplace or leave the company, a demand that has faced pushback in Germany, where the company has a new factory.
“Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,” Musk wrote in that e-mail. “If you don’t show up, we will assume you have resigned.”
Musk on Thursday also engaged in a Twitter spat with Australia tech billionaire and Atlassian PLC cofounder Scott Farquhar, who ridiculed the directive in a series of tweets as being “like something out of the 1950s.”
“Recessions serve a vital economic cleansing function,” Musk replied to Farquhar, who encouraged Tesla employees to look into its remote work positions.
Late last month, when asked by a Twitter user whether the economy was approaching a recession, Musk said: “Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.”
Tesla, which has factories in the US, China and near Berlin, employs about 99,290 staff globally, so culling 10 percent of jobs could equate to losses of about 10,000 people.
The company cut its workforce by 7 percent — or more than 3,000 jobs — in early 2019, warning that the “road ahead is very difficult” in making electric vehicles more affordable for the mass market.
Tesla produced a record 930,422 vehicles last year and delivered 936,222, despite a global chip shortage that has been ongoing for more than 12 months.
In China, Tesla’s second-most important market after the US, the company’s Shanghai factory was shut for three weeks in April. It generally produces about 2,100 vehicles a day.
Economic growth in the US looks to have downshifted in the past few weeks in the face of headwinds that include rising interest rates and inflation, the US Federal Reserve said earlier this week.
Price gains might be moderating in parts of the country, as households and businesses navigate higher rates, the Russian invasion of Ukraine and ongoing disruptions due to COVID-19.
Meanwhile, the Chinese government is pulling out all stops to spur economic growth as COVID-19 outbreaks and lockdowns crush consumer confidence. Part of that plan involves getting consumers to buy more vehicles, with authorities last month outlining a sales tax reductions for passenger vehicles that would amount to about 60 billion yuan (US$9.01 billion).
Additional reporting by Bloomberg
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