Elon Musk now tells execs Tesla needs to cut staff by 10%

Elon Musk now tells execs Tesla needs to ‘pause all hiring worldwide’ and cut staff by 10% because he has a ‘super bad feeling’ about the economy in latest internal email to execs

  • Elon Musk told top managers he had a ‘super bad feeling’ about the economy 
  • The Tesla electric carmaker said he needed to cut staff by about 10 per cent
  • An email with the news about was sent to company executives on Thursday  

Tesla Chief Executive Elon Musk told top managers he had a ‘super bad feeling’ about the economy and that the electric carmaker needed to cut staff by about 10 per cent, according to an internal email.

The email, titled ‘pause all hiring worldwide’, was sent to Tesla executives on Thursday, and underscored an increasingly gloomy economic outlook for the globe, as prices soar and war in Ukraine passes its 100th day.

Musk earlier this week asked Tesla employees to return to the office or leave the company.

Tesla Chief Executive Elon Musk told top managers he had a ‘super bad feeling’ about the economy and that the electric carmaker needed to cut staff by about 10 per cent, according to an internal email 

‘Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,’ Musk wrote in another email sent to employees on Tuesday night.

‘If you don’t show up, we will assume you have resigned.’

The message from Musk came shortly after Jamie Dimon, Chairman and Chief Executive of JPMorgan Chase, described the challenges facing the US economy as akin to a ‘hurricane’.

However, although financial experts acknowledged a ‘bad feeling’, many were unsure a global recession is on the cards.

Carsten Brzeski, global head of macroeconomic research at ING, said: ‘Musk’s bad feeling is shared by many people.

‘We’re talking about stagnation and a global economy which has to go through significant structural change, such as decarbonisation, deglobalisation and adjusting to older societies.

‘But we are not talking about global recession. We expect a cooling of the global economy towards the end of the year. The US will cool off, while China and Europe are not going to rebound.

‘Laying off workers, however, is not the best reaction. We will need skilled workers more than ever in the future. This could turn into firing and then hiring.’

Fiona Cincotta, a financial markets analyst at City Index in London, said: ‘Although the Fed thinks a soft landing is possible … there are some warning signs in the economy. We know that growth is slowing and inflation remains persistently high and we know that the Fed will need to act aggressively to bring inflation back down.

The email, titled ‘pause all hiring worldwide’, was sent to Tesla executives on Thursday, and underscored an increasingly gloomy economic outlook for the globe, as prices soar and war in Ukraine passes its 100th day (File image)

Musk earlier this week asked Tesla employees to return to the office or leave the company. Pictured: Tesla China-made Model 3 vehicles are seen during a delivery event at the carmaker’s factory in Shanghai, China (File Photo)

‘The question is – will they be able to act as aggressively as they need to, and obviously Elon Musk doesn’t think that they’re going to be able to, without putting the economy into a deep recession. China slowdown is an added problem.’

The former Italian treasury chief economist, Lorenzo Codogno, said it was ‘clear rising prices will weaken consumption’.

He said: ‘If the inflation flare-up starts fading at the beginning of next year we will probably not see as dramatic an impact on the global economy as Musk seems to indicate.

‘If the shock is temporary, companies will probably have an interest in not losing human capital.’

‘Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,’ Musk previously wrote

Responding to a question on Twitter from a follower about whether he has a comment to ‘people who think coming into work is an antiquated concept’, Musk wrote back: ‘They should pretend to work somewhere else’

Francois Savary, chief investment officer at Prime Partners, hit out at Musk’s comments.

He said: ‘At the end of the day it’s easy to make such comments. Everyone has fears but there is no sign yet to justify such a negative outlook.

‘There is a risk of recession but you need to see numbers heading in that direction and so far there are none.

‘It will depend a lot on what happens in the labour market. If we have a significant deterioration of US labor markets over the summer, then there is a risk of recession next year.’

Daniel Ives, managing director and senior tech analyst at Wedbush Securities tweeted: ‘Elephant in the room now remains the radio silence on Twitter deal. Musk more negative on economy, what’s next in Twitter saga.’ 

Tesla was not immediately available for comment.

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