Exclusive: Elon Musk wants to cut 10% on Tesla jobs

  • Tesla will employ about 100,000 people by the end of 2021
  • Musk warned employees Tuesday to return to the office or leave
  • U.S. executives are increasingly sounding dark about the economy

San Francisco, June 3 (Reuters) – Tesla (TSLA.O) CEO Elon Musk said in emails he saw in Reuters that he had a “very bad feeling” about the economy and wanted to reduce the electric car maker’s pay by 10%.

A message sent to executives on Thursday highlighted his concerns and said “suspend all hiring around the world.” The outlook comes two days after millionaire employees were told to return to work or leave, and business leaders’ warnings about the dangers of a recession are mounting.

Shares of Tesla fell 9% in US trade on Friday after a Reuters report. Technology is very Nasdaq (.IXIC) About 2% less.

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In another email sent to employees on Friday, Musk said Tesla would reduce the number of salaried employees by 10% as it became “more staff in many areas.” But, “the number of heads increases once an hour,” he said.

“Note, this does not really apply to cars, battery packs or anyone installing solar,” Musk wrote in an Reuters email.

Its annual SEC filing shows that by the end of 2021 Tesla and its subsidiaries will have hired nearly 100,000 people. It does not divide wages by the number of hourly workers.

Tesla’s expanding payroll

The Texas-based company was not immediately available for comment.

Musk has warned of the dangers of a recession in recent weeks, but the email directing an order to freeze hiring and lay off staff is a very direct and high-quality message from the head of an automaker, while others describe the high demand in the sky. read more

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“Elon Musk has a uniquely informed insight into the world economy. We hope a message from him will be more credible,” said Adam Jonas, a researcher and Morgan Stanley, in a statement.

Shanghai Lockdown

So far, demand for Tesla cars and other electric vehicles (EVs) has been strong, and many traditional indicators of decline – including rising dealer inventory and incentives in the United States – have not worked.

But after COVID-19 locks forced costly malfunctions, Tesla struggled to restart production at its Shanghai plant.

“It’s always better to introduce austerity measures than good times. I see reports as a precautionary and precautionary measure,” said Frank Schwope, a Hanover – based NordLB analyst.

Musk’s dark vision echoes recent comments from executives, including JPMorgan Chase & Co CEO Jamie Dimon and Goldman Sachs chairman John Waltron.

“There’s a hurricane in our path,” Timon said this week. read more

Inflation in the United States has been at a 40-year high and has caused a rise in the cost of living for Americans, while the Federal Reserve faces the daunting task of reducing enough to control inflation without causing a recession.

It was not immediately clear what impact Musk’s vision would have on the $ 44 billion bid for Twitter. (TWTR.N). U.S. hopeful regulators allowed way for a deal on Friday, with Twitter raising its stake by 2%. read more

Many analysts have recently lowered price targets for Tesla, which has forecast lost production at its Shanghai plant, which is the hub for supplying and exporting EVs to China.

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China will account for one-third of Tesla’s global deliveries by 2021, according to company data and sales data released there. On Thursday, Daiwa Capital Markets estimated that about 32,000 orders were waiting for delivery at Tesla, compared to 600,000 vehicles for BYD (002594.SZ)Its biggest EV competitor in that market.

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‘Stop all hiring’

Prior to Musk’s warning, Tesla had about 5,000 job posts on the LinkedIn from sales in Tokyo and engineers at its new Berlin Gigafactory to in-depth learning scientists at Palo Alto. It had planned an online hiring event for Shanghai on June 9 on its WeChat channel.

Musk’s demand for staff to return to office has already met with backlash in Germany. Read more A union leader has said his plan to cut jobs in the Netherlands, where Tesla’s is headquartered in Europe, is facing opposition.

“You can’t just lay off Dutch workers,” said Hans Walti, a FNV union spokesman.

In a Tuesday email, Musk said Tesla employees must be in the office at least 40 hours a week and close the door on any remote work. If you do not come, we will assume that you have resigned, he said.

Jason Stomal, founder of Tech Talent Agency Cadre, said the memo returning to the office was a way to get people out.

“(Kasturi) knows workers are not going to come back,” he said, adding that it would be cheaper for Tesla because there was no need for a cut.

Musk has repeatedly mentioned the risk of recession in recent comments.

Speaking at a televised conference in mid-May on Miami Beach, he said: “We’ll probably have a recession and that recession will get worse.”

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Additional Reporting by John O’Donnell, Ju-Min Park, Choi Zhang, Toby Sterling and Sarah Morland and Nivedita Balu by Hoon Joo Jin; Editing by John Stone Street, Mark Potter, Nick Jiminsky and Lisa Schumacher

Our standards: Thomson Reuters Trust Principles.

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