Pessimistic about the economic situation, Elon Musk plans to cut 10% of Tesla employees

Tesla’s move to halt hiring globally reinforces the warning of business leaders about the risk of an impending recession.

According to filings with the US Securities and Exchange Commission (SEC), Tesla currently has nearly 100,000 employees at the company and branches as of the end of 2021.

On June 3, shares of the electric vehicle company fell nearly 3% in the US market and 3.6% on the Frankfurt stock exchange, respectively, after the information about the hiring freeze and staff cuts was announced. Reuters disclosure. Nasdaq US index futures turned negative and fell 0.6%.

In recent weeks, Musk has repeatedly warned of the risk of an economic recession. The request to freeze recruitment and reduce staff is the most direct move from the head of the electric vehicle manufacturing company.

To date, demand for Tesla cars and other electric vehicles remains strong. Traditional indicators of a recession, such as increased dealer inventories or market incentives, have yet to emerge.

However, the American electric car company is struggling with reopening its Shanghai manufacturing plant after a long shutdown due to Covid-19. According to publicly available figures provided by the company, China accounts for more than a third of the electric vehicle company’s global output in 2021.

Inflation in the US is at a 40-year high, causing the cost of living to skyrocket, pushing the Federal Reserve (FED) to face the difficult task of controlling inflation without causing a recession. recession with the economy.

Before the head of the company asked to stop hiring, Tesla was looking for about 5,000 positions on LinkedIn with sales jobs in Tokyo, engineer at a super factory in Berlin and deep-learning specialist in Palo Alto. The company also plans to hold an online recruitment event in Shanghai on June 9 on WeChat channel.

Musk did not share details about why he had a “super bad feeling” about the economic outlook and declined to comment on related information.

Earlier this week, Tesla CEO also sent an email to all employees company, stating a “minimum 40 hours in office” requirement, and if the employee does not show up, the company automatically considers the person to quit voluntarily.

Jason Stomel, founder of technology talent recruitment company Cadre, believes that the “ultimatum” to force employees to return to the office is actually “a disguised layoff” because the Tesla CEO knew in advance that there would be employees who do not approve this request.

Vinh Ngo (According to CNBC)