SpaceX founder and CEO of Tesla, Elon Musk, will visit the construction site of Tesla’s Giga Factory on May 17, 2021 in Grünheide, near Berlin, Germany.
Michele Tantussi | Reuters
Tesla CEO Elon Musk has “very bad feelings” about the economy and needs to cut about 10% of the work of electric car makers, Reuters said in an email to executives.
A message titled “Pause All Recruitment Around the World” sent Thursday arrived two days after a millionaire told staff to return to work or quit, a business leader on the risk of a recession. The chorus of warnings from is increasing.
Tesla hired about 100,000 people at the company and its subsidiaries at the end of 2021, according to the annual SEC Filing.
The company couldn’t get immediate comments.
Tesla’s stock fell nearly 3% in US premarket trading on Friday, and its Frankfurt-listed stock fell 3.6% after Reuters reported. US Nasdaq futures turned negative, down 0.6%.
Musk has warned about the risk of recession in recent weeks, but his email ordering job freezes and staff cuts was the most direct and attention-grabbing message of this kind from the automaker’s head. rice field.
So far, demand for Tesla and other electric vehicles remains strong, and many of the traditional indicators of recession, such as increased dealer inventory and incentives in the United States, have not been realized.
However, Tesla struggled to resume production at its Shanghai plant after the blockade of Covid-19 forced a costly shutdown of the plant.
Carsten Brzeski, Global Head of Macroeconomic Research at Dutch Bank ING, said: “But we’re not talking about a global recession. We expect the global economy to cool towards the end of the year. The United States will cool, but China and Europe will not recover.”
Musk’s pessimistic outlook reflects recent comments from executives, including: JPMorgan Chase With CEO Jamie Dimon Goldman Sachs President John Waldron.
“The hurricane is on our way,” Dimon said this week.
Inflation in the United States has been at its highest level in 40 years, and the cost of living for Americans is skyrocketing. Meanwhile, the Federal Reserve faces the daunting task of curbing demand enough to curb inflation without causing a recession.
According to Forbes, Musk, the wealthiest man in the world, did not elaborate on the reasons for his “very bad feelings” about the economic outlook in a short email Reuters saw.
Recently, many analysts have lowered Tesla’s price target, predicting delays in delivery due to China’s blockade and reduced production at its Shanghai plant, a hub for supplying and exporting electric vehicles to China.
According to the company’s disclosure and data on sales in China, China accounted for more than one-third of Tesla’s global deliveries in 2021.
Wedbush Securities analyst Daniel Ives tweeted that Musk and Tesla “have moved ahead of slow delivery growth this year and are trying to maintain margins ahead of the economic slowdown.”
“Pause all hires”
Prior to Musk’s warning, Tesla posted about 5,000 job listings on LinkedIn, from sales in Tokyo and engineers at the new Giga Factory in Berlin to deep learning scientists at Palo Alto. We were planning an online recruitment event in Shanghai on June 9th on the WeChat channel.
Mask’s request for staff to return to the office is already facing a backlash in Germany.
“Everyone in Tesla needs to spend at least 40 hours a week in the office,” Musk wrote in an email Tuesday. “If you do not appear, we consider you to resign.”
Musk repeatedly mentions the risk of recession in his recent comments.
“We’re probably in a recession, and I think it’s going to get worse,” Musk said in a remote speech at a conference in Miami Beach in mid-May. “Probably a year, perhaps 12 to 18 months, doesn’t seem like the time it will take for the fix to take place, but it will be a bit more difficult,” he added.
When asked by Twitter users in late May if they were approaching a recession, Musk said, “Yes, but this is actually a good thing. I’ve been giving fools money for a long time. Some bankruptcies. Should happen. “
Musk also engaged in Twitter spats on Thursday with Australian Technique Billionaire and Atlassian Plc co-founder Scott Farkhar.
“The recession plays an important economic cleansing function,” Musk tweeted in response to Farkhar’s tweet, which urged Tesla employees to investigate remote work positions.
Jason Stomel, founder of the technical talent agency Cadre, said of the Return to Work Directive: There is a temporary dismissal. “
“(Mask) knows that there is a percentage of workers who never come back,” he said.
