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Highlights:
- Elon Musk said he wants to cut 10% of jobs in Tesla.
- Musk, who ordered to freeze all hiring around the globe, warns of a looming recession.
- Tesla stocks fell 9% on Friday after Reuters reported his remarks.
Tesla Inc (Nasdaq:TSLA) chief Elon Musk said that he wants to cut 10% of company employees, noting that he has a “super bad feeling” about the economy that forced him to take the decision.
To a Reuters query about his comments, US President Joe Biden retorted that he wished Musk "lots of luck" on his "trip to the moon."
"While Elon Musk is talking about that, Ford is increasing their investment overwhelmingly," Biden replied to the scribe. "Ford is increasing investment and building new electric vehicles. Six thousand new employees, union employees I might add, in the Midwest."
Musk had sent out a message to executives to freeze all hirings in the company worldwide.
Just two days ago, he had told his staff to return to work or take the exit door, which drew a lot of mixed reactions from people all around.
In the past few weeks, Musk had been quite vocal about the risks of a recession. Tesla stocks tumbled over 9% on Friday after the Reuters report. The tech-dominated Nasdaq fell 2%.
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© Winnietam | Megapixl.com
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Tesla is overstaffed, says Elon Musk
The billionaire said that Tesla is overstaffed and needs to slash 10% of its salaried workforce. However, he also said the hourly headcount would increase.
In another email seen by Reuters, Musk wrote, "Note, this does not apply to anyone actually building cars, battery packs or installing solar."
Tesla and its subsidiaries had a headcount of almost 100,000 people at the end of last year. Although there has been strong demand for Tesla cars, the EV maker had to endure its manufacturing units being shut for several months in Shanghai due to strict covid lockdowns.
Meanwhile, the US antitrust regulators gave a green signal for the Twitter deal on Friday, following which Twitter (NYSE:TWTR) shares climbed 2%. It is to be seen what impact of Musk’s announcement of job cuts would have on his US$44 billion Twitter deal.
Bottom line:
Besides Musk, many high-profile executives, including JPMorgan Chase CEO Jamie Dimon and Goldman Sachs President John Waldron, have echoed similar views on recession. With US inflation at a 40-year high, it will be a tough fight for the Fed to rein in the rising costs and not let off a recession.
