In an email to executives seen by Reuters, Tesla's CEO Elon Musk said that he has a "super bad feeling" about the economy and that he wanted to reduce the company's workforce by about 10%.
NEW YORK, NEW YORK - MAY 02: Elon Musk attends The 2022 Met Gala Celebrating "In America: An Anthology of Fashion" at The Metropolitan Museum of Art on May 02, 2022 in New York City.
Pessimistic Outlook
The warning came two days after the world's wealthiest man instructed the automaker's staff to either return to the workplace or quit their jobs. Tesla did not respond to requests for comment after the news.
According to Tesla's annual SEC filing, the corporation and its subsidiaries will employ over 100,000 workers by the end of 2021.
Elon Musk's warning about a potential recession and its impact on the auto industry is regarded as a high-profile forecast that caught the attention of the public and media.
Although fears of a recession have intensified recently, demand for Tesla cars and other electric vehicles has remained high, and many of the traditional markers of a downturn, such as rising dealer inventories in the US, have yet to materialize.
However, after the recent COVID-19 lockdowns in China caused costly disruptions, Tesla has struggled to restart production at its Shanghai factory.
Musk's pessimistic outlook is also in line with remarks from executives such as Jamie Dimon, CEO of JPMorgan Chase & Co (JPM.N), and John Waldron, President of Goldman Sachs.
Inflation in the United States is near 40-year highs, raising the cost of living for Americans, while the Federal Reserve has the tough task of dampening demand enough to prevent a recession.
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"Pause All Hiring Worldwide"
Reuters noted that Tesla had roughly 5,000 job posts on LinkedIn before Musk's warning, which came in an email labeled "pause all hiring worldwide." Jobs ranged from sales in Tokyo to engineers in its new Berlin gigafactory to deep learning scientists in Palo Alto.
Musk's insistence that employees return to work has already been met with opposition in Germany.
The billionaire wrote in the email that every worker of Tesla should spend a minimum of 40 hours of office work per week. Musk said that if the worker does not show up, they will be assumed to have resigned.
Scott Farquhar vs. Elon Musk Twitter Feud
Musk also got into a Twitter dispute on Thursday, June 2, with Scott Farquhar, an Australian software millionaire and co-founder of Atlassian Plc (TEAM.O), who mocked Tesla's directive in a series of tweets, calling it " like something out of the 1950s."
News from @elonmusk & @tesla today feels like something out of the 1950s: "Everyone at Tesla is required to spend a minimum of 40 hours in the office per week". Very different approach to what we are taking at Atlassian and here's why. 🧵 (1/5)
— Scott Farquhar (@scottfarkas) June 2, 2022
In response to a tweet by Farquhar encouraging Tesla staff to look for remote work positions, Musk tweeted that recessions are a "vital economic cleansing function."
When asked whether the economy was approaching a recession by a Twitter user in late May, Musk said, "Yes, but this is actually a good thing. It has been showering money on fools for far too long. Some bankruptcies are needed."
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This article is owned by Tech Times
Written by Joaquin Victor Tacla
