Elon Musk wants to cut 10% of Tesla jobs: 'Pause hiring', says email

Billionair Elon Musk He said in an email to executives that he “feels very bad” about the economy and “needs to cut about 10% of jobs” at the electric car maker. Tesla. Reuters was able to view the text.

The letter, titled “Pause All Hiring Worldwide,” was sent two days after the billionaire told employees to return to work or leave, and joins a growing tide of warnings from business leaders about the risks of a recession.

Nearly 100,000 people are employed in Tesla and its subsidiaries in late 2021, according to filing with the Securities and Exchange Commission (SEC) — the U.S. equivalent of the Securities and Exchange Commission. When asked, the automaker has not commented on the issue.

Actions Tesla It fell nearly 3% in the US retail market and its Frankfurt-listed shares fell 3.6% after the Reuters report. US Nasdaq futures turned negative and fell 0.6%.

Musk has warned in recent weeks about the risks of a recession, but his email ordering a hiring freeze and staff cut was the direct and most well-known message from the automaker’s boss.

So far, the demand for cars from Tesla And other electric vehicles (EV) remained strong, and many of the traditional indicators of slowdown — including increased inventories and incentives for US dealers — did not materialize.

But Tesla It has struggled to restart production at its Shanghai factory after the shutdown caused by the Covid-19 pandemic led to costly shutdowns.

“A lot of people share Musk’s bad spirits,” said Carsten Brzeski, global head of macroeconomic research at Dutch bank ING.

“But we are not talking about a global recession. We expect the global economy to calm down at the end of the year. The United States will calm down, while China and Europe will not recover.”

Musk’s bleak outlook reflects recent comments from executives including Jamie Dimon, CEO of JPMorgan Chase & Co., and Goldman Sachs Chairman John Waldron.

“There’s a hurricane on the road directly toward us,” Damon said this week.

Inflation in the United States has raised the cost of living for Americans, as the Federal Reserve faces the difficult task of curbing demand enough to contain inflation without causing a recession.

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

It also wasn’t immediately clear what the implication, if any, of Musk’s vision of his $44 billion offer to buy would be Twitter.

Many analysts lowered price targets for Tesla Recently, it projected production losses at its Shanghai plant, a hub that supplies electric vehicles to China and for export.

China accounts for just over a third of the company’s global deliveries. Tesla in 2021, according to company disclosures and data from sales in the country.

Daiwa Financial Markets, Thursday, estimated that Tesla It had about 32,000 orders awaiting delivery in China, compared to 600,000 vehicles from BYD, its biggest competitor for electric vehicles in that market.

Wedbush Securities analyst Daniel Ives said in a tweet that he looks like Musk and Tesla They were “trying to stay ahead of the slower delivery slope this year and maintain margins ahead of the economic downturn.”