Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Musk wants to cut 10 percent of Tesla jobs: Report

Musk wants to cut 10 percent of Tesla jobs: Report

Tesla CEO Elon Musk has a ‘super bad feeling’ about the economy, he said in an email to executives seen by Reuters news.

Tesla CEO Elon Musk has a “super bad feeling” about the economy and needs to cut about 10 percent of jobs at the electric carmaker, he said in an email to executives seen by the Reuters news agency.

The message, sent on Thursday and titled “pause all hiring worldwide”, came two days after the billionaire told staff to return to the workplace or leave, and added to a growing chorus of warnings from business leaders about the risks of a recession.

Almost 100,000 people were employed at Tesla and its subsidiaries at the end of 2021, its annual Securities and Exchange Commission (SEC) filing showed.

The company was not immediately available for comment.

Tesla shares fell nearly 5 percent in US pre-market trade on Friday and its Frankfurt-listed stock was down 3.6 percent after the Reuters report. US Nasdaq futures turned negative and were trading 1 percent lower.

Musk has warned in recent weeks about the risks of recession, but his email ordering a hiring freeze and staff cuts was the most direct and high-profile message of its kind from the head of a carmaker.

So far, demand for Tesla cars and other electric vehicles (EV) has remained strong and many traditional indicators of a downturn – including increasing dealer inventories and incentives in the United States – have not materialised.

But it has run into some regulatory woes. The National Highway Traffic Safety Administration (NHTSA) said Friday it asked the EV company to respond to questions by June 20 after it received 758 reports of unexpected brake activation tied to the carmaker’s driver assistance system Autopilot.

In February, NHTSA opened a preliminary evaluation into 416,000 2021-2022 Tesla Model 3 and Model Y vehicles in the US after the agency said it had received 354 complaints about the issue during the past nine months.

Tesla has also struggled to restart production at its Shanghai factory after 1COVID1-19 lockdowns forced costly outages.

“It is always better to introduce austerity measures in good times than in bad times. I see the statements as a forewarning and a precautionary measure,” said Hanover-based NordLB analyst Frank Schwope.

Earlier this week in an email to all employees, Tesla Inc CEO Elon Musk demanded they return back to the office and said that working from home was no longer an option


Many carmakers achieved record profits in 2021, but the economic situation is now more uncertain, he noted.


Gloomy forecast


Musk’s gloomy outlook echoes recent comments from executives including JPMorgan Chase & Co CEO Jamie Dimon and Goldman Sachs President John Waldron.

A “hurricane is right out there down the road coming our way”, Dimon said this week.

Inflation in the United States is hovering at 40-year highs and has caused a jump in the cost of living for Americans, while the Federal Reserve faces the difficult task of dampening demand enough to curb inflation while not causing a recession.

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

It was also not immediately clear what implication, if any, Musk’s view would have for his $44bn bid for Twitter. US antitrust regulators cleared the deal on Friday, sending Twitter shares up nearly 2 percent in pre-market trading.

Several analysts have cut price targets for Tesla recently, forecasting lost output at its Shanghai plant, a hub supplying EVs to China and for export.

China accounted for just more than a third of Tesla’s global deliveries in 2021, according to company disclosures and data released on sales there. On Thursday, Daiwa Capital Markets estimated Tesla had about 32,000 orders awaiting delivery in China, compared with 600,000 vehicles for BYD, its larger EV rival in that market.

Wedbush Securities analyst Daniel Ives said in a tweet it appeared Musk and Tesla were “trying to be ahead of a slower delivery ramp this year and preserve margins ahead of an economic slowdown.”


‘Pause all hiring’


Before Musk’s warning, Tesla had about 5,000 job postings on LinkedIn from sales in Tokyo and engineers at its new Berlin gigafactory to deep learning scientists in Palo Alto. It had scheduled an online hiring event for Shanghai on June 9 on its WeChat channel.

Tesla vehicles in Shanghai, China, where Tesla has struggled to restart production at its Shanghai factory after 1COVID1-19 lockdowns forced costly outages


Musk’s demand that staff return to the office has already faced pushback in Germany. And his plan to cut jobs would face resistance in the Netherlands, where Tesla has its European headquarters, a union leader said.

“You can’t just fire Dutch workers,” said FNV union spokesperson Hans Walthie, adding Tesla would have to negotiate with a labor union on terms for any departures.

In a Tuesday email, Musk had said Tesla employees were required to be in the office for a minimum of 40 hours per week, closing the door on any remote work. “If you don’t show up, we will assume you have resigned,” he said.

Musk has referred to the risk of a recession repeatedly in recent comments.

Remotely addressing a conference in mid-May in Miami Beach, he said, “I think we are probably in a recession and that recession will get worse.”

Other companies have cut jobs or are slowing or pausing hiring amid weakening demand.

Last month, Netflix said it had laid off about 150 people, mostly in the United States, and Peloton said in February it would cut 2,800 jobs. Meta Platforms, Uber and other technology companies have slowed hiring.

In June 2018, Musk said Tesla would cut 9 percent of its workforce as the then-loss-making company struggled to ramp up output of Model 3 electric sedans, although data in its SEC filings showed reductions were more than offset by hiring by year-end.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
×