Tesla CEO Elon Musk has proposed cutting around 10% of jobs at the electric car maker. This has been indicated by the billionaire in an email to company executives seen by the Reuters agency. The message about the layoffs, which has come two days after the world’s richest man required his employees to return to the workplace or leave the company, would be based on “a highly pessimistic sentiment” that Musk has about the economy. and his forecasts of a recession. Tesla employed around 100,000 people at the end of 2021, according to its annual filing with the US regulator.
Musk’s stark warning of a potential recession and ripple effect for automakers is the most direct and high-profile forecast of its kind in the industry. While concerns about the risk of a recession have increased, demand for Tesla cars and other electric vehicles has remained strong. Nonetheless, Tesla has struggled to restart production at its Shanghai factory after COVID-19 lockdowns forced costly plant outages.
Musk’s gloomy outlook echoes recent comments from executives including JPMorgan CEO Jamie Dimon and Goldman Sachs Chairman John Waldron. A “hurricane is right there, on the way, coming our way,” Dimon said this week. Inflation in the United States is hovering around 40-year highs and has caused a rise in the cost of living for Americans, while the Federal Reserve faces the difficult task of reducing demand enough to curb inflation without causing a recession.
“Everyone at Tesla must spend a minimum of 40 hours in the office per week,” Musk wrote in his email on Tuesday. “If he doesn’t show up, we’ll assume he has resigned.” Musk also engaged in a Twitter dispute Thursday with Australian tech billionaire and Atlassia co-founder Scott Farquhar, who derided the directive in a series of tweets as “something out of the 1950s.”
Musk tweeted: “Recessions serve a vital economic cleansing function” in response to a tweet from Farquhar, who encouraged Tesla employees to investigate their remote jobs. In late May, when asked by a Twitter user if the economy was approaching a recession, Musk said: “Yes, but it’s actually a good thing. It’s been raining money on fools for too long. They need to happen.” some bankruptcies.
