Musk said that Tesla needs to decrease staff by 10%, saying he had a “super bad feeling” about the economy.
U.S. automaker Tesla is reportedly pausing its worldwide hiring and reducing 10% of staff.
Tesla CEO Elon Musk reportedly sent an email to Tesla executives last Thursday saying he had a “super bad feeling” about the economy. They were told to “pause all hiring worldwide,” according to an email seen by Reuters.
However, Elon issued another memo on Friday. Musk clarified that the 10% job cut was for salaried workers and not hourly workers.
According to CNBC, Musk’s second memo stated, “Note this does not apply to anyone actually building cars, battery packs, or installing solar. Hourly headcount will increase.”
Musk also issued an email earlier this week asking Tesla employees to stop remote work or leave the company.
“Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,” he said in the email. “If you don’t show up, we will assume you have resigned.”
According to its annual SEC filing, as of the end of 2021, Tesla employed almost 100,000 people.
After this news, Tesla’s shares closed at more than 9%. Its shares dropped to more than 25% this year.
Tesla did not make any comment on the matter.
Last Friday, US President Joe Biden was asked about Musk’s “super bad feeling” about the U.S. economy. Biden said that while Musk has a negative outlook on the economy, Ford is increasing its investment ‘overwhelmingly’ over electric vehicles. He added that Ford had added 6,000 new union employees in the Midwest.
He also mentioned the former Chrysler corporation, Stellantis, which made similar investments in electric vehicle production. He also lauded Intel, which added 20,000 new jobs in making computer chips.
“So, you know, lots of luck on his trip to the moon,” Biden stated.
Elon Musk replied with a tweet, “Thanks Mr President!”
The new email stated as transcribed by CNBC:
Subject: Headcount Reduction
Date: Friday, June 3, 2022
Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas. Note this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.