Elon Musk warns of job cuts at Tesla; pauses hiring
Tesla CEO Elon Musk has sent another bombshell email to company executives. In the internal email accessed by Reuters, Musk has said that the automaker needs to cut staff by around 10%. The mail titled "pause all hiring worldwide" comes in the backdrop of the billionaire's ultimatum to his employees to return to work or quit the company.
Why does this story matter?
It seems that Tesla executives cannot catch a break from their CEO's emails. First, it was the mandatory office hours, and now, job cuts. Like the first time, Musk has a good reason for this too. The global economy is indeed going through a lean patch. The ongoing Russia-Ukraine crisis and the slowdown of growth elsewhere are certainly key concerns.
Tesla could cut around 10,000 jobs
Musk's email titled "pause all hiring worldwide" was sent to Tesla executives. In the message, the world's richest man said that he has a "super bad feeling" about the economy. He outlined that the EV maker has to cut around 10% of jobs. According to its annual SEC filing, Tesla has around 99,920 staff worldwide. So 10% would mean nearly 10,000 jobs.
Tesla had cut 7% of its workforce in 2019
If Musk follows through with his email, it won't be the first time Tesla has had to cut jobs to navigate a troubled economy. In early 2019, the company had cut 3,000 jobs or 7% of its workforce at the time.
US and China are reeling under economic pressure
The global economy has been on a downswing lately. Economic growth in the US has taken a backseat due to rising interest rates and inflation. China, at the same time, is reeling from the effects of COVID outbreaks and strict lockdowns. Tesla's factory in Shanghai which produces 2,100 cars/day was shut for three weeks. The Russia-Ukraine crisis has amplified economic issues around the world.
Musk wants employees in the office for minimum 40 hours/week
The internal email sent to Tesla executives by Musk is not the first this week. Previously, the CEO had asked his employees to be present in the office for at least 40 hours/week. He even said that not showing up would amount to quitting.
