New Delhi:
The CEO of Tesla Elon Musk feels worst economically, needs to reduces 10% of paid workers. Musk is “deeply saddened” by the economy and needs to cut about 10% of the leading employees in the electric car company, he said in emails seen by Reuters.
A message sent to management on Thursday expressed concern about the situation and told them to “stop working around the world.” The difficult decision came two days after a millionaire told workers to return to work or leave and add to a growing discussion of warnings from business leaders about the dangers of an economic downturn.
Tesla shares fell 9% in US trading on Friday following a Reuters report. The tech-heavy Nasdaq dropped by about 2%. In another email to workers on Friday, Musk said Tesla would be reducing its pay by 10%, as “there are already more people in many places.” But “the number of hours will go up,” he said.
“Note, this does not apply to anyone who builds cars, battery packs or installs solar,” Musk wrote in an email seen by Reuters.
About 100,000 people were employed by Tesla and its subsidiaries by the end of 2021, according to the SEC’s annual submission. It did not divide the number of paid employees and hourly workers. The Texas-based company could not be reached for comment.
Musk warned in recent weeks of the dangers of the economic downturn, but his email ordering the hiring of crews and crews was a straightforward and high-profile message of its kind from the automaker’s head, some describing a huge demand in the sky.
“Elon Musk has a special knowledgeable knowledge of the global economy. We believe the message from him will carry high credibility,” Adam Jonas, a commentator Morgan Stanley, said in a statement.
SHANGHAI LOCKDOWN
To date, demand for Tesla vehicles and other electric vehicles (EV) remains strong and many traditional indicators of decline – including rising retail prices and incentives in the United States – have not materialized.
But Tesla has struggled to resume production at its Shanghai factory after the closure of the COVID-19 which forced the exit.
“It’s always better to introduce consolidation measures in good times than in bad times. I see the statements as a warning and a defensive measure,” said Hanover-based NordLB analyst Frank Schwope.
Musk’s disappointed view agrees with recent comments by executives including JPMorgan Chase & Co CEO Jamie Dimon and Goldman Sachs President John Waldron.
“The storm is down there on the road coming towards us,” Dimon said this week.
Inflation in the United States rises to 40 years and causes a rise in the cost of living for the American people, while the Federal Reserve faces the daunting task of reducing demand enough to curb inflation while not creating recession.
It is not immediately clear what Musk’s vision will be about his $ 44 billion Twitter account. U.S. antitrust regulators opened the deal on Friday, sending Twitter shares up 2%.
Several analysts have cut Tesla’s prices recently, predicting a lost result in its Shanghai industry, a center that provides EVs in China and exports.
China accounted for more than a third of Tesla’s land acquisition in 2021, according to a company that disclosed data released from sales there. On Thursday, Daiwa Capital Markets estimates that Tesla had about 32,000 orders waiting to be delivered to China, compared to 600,000 BYD cars, its main competitor EV in that market.
‘STOP ALL THE EMPLOYEES’
Prior to Musk’s warning, Tesla had about 5,000 jobs on LinkedIn from sales in Tokyo and an engineer at his new Berlin gigafactory to in-depth scientists at Palo Alto. It has organized an online rental event in Shanghai on June 9 on its WeChat channel.
Musk’s demand for staff to return to office is already under pressure in Germany. And his plan to cut jobs would face opposition in the Netherlands, where Tesla has its European headquarters, the union leader said.
“You can’t just fire Dutch workers,” said FNV union spokesman Hans Walthie, adding that Tesla would have to negotiate with the trade union on the terms of any departure.
In an email on Tuesday, Musk said Tesla employees should be in office for at least 40 hours a week, closing the door on any remote work. “If you don’t come we will assume you have resigned,” he said.
Jason Stomel, founder of tech talent agency Cadre, said an invitation to return to office could be a way to get people moving.
“Elon Musk knows there is a percentage of workers who will not return,” he said, adding that it would be cheaper for Tesla because no separation would be required.
Musk referred to the risk of recession several times in recent comment speaking away from the conference in mid-May in Miami Beach, he said: “I think we are probably in a state of recession and that recession will be even worse.”
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