Elon Musk has imposed a worldwide hiring freeze at Tesla and has plans to lay off ten per cent of the workforce because he has “a very bad feeling” about the economy. He has already confirmed the plans to Reuters.
At the end of 2021, Tesla was employing around 100,000 people worldwide, meaning that 10,000 jobs could be affected. The subject line in Musk’s email to executives, cited by Reuters, read: “Pause all hiring globally”.
Musk himself has since confirmed the authenticity of the email. In a very brief email to all employees, Musk said that the job cuts would only 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,” he continued. For those who are still paid by the hour, the number of employees is expected to continue to rise.
Over the last few weeks Musk – along with a growing number of economists and traders – already warned publicly about the risks of a recession. The email about the hiring freeze came only two days after Musk sent an email to all Tesla employees saying that employees should return to the office for at least 40 hours a week or basically get fired.
This demand to get back to the office in no uncertain terms faced blowback from Germany’s largest trade union – IG Metall– on Thursday just past. The union that is active where Tesla’s plant is located has already said it would support any employee who opposed Musk’s ultimatum.
Tesla had over 5,000 open positions prior to Musk’s announcement to stop hiring and cut back on salaried employees. Many of these open roles are at Tesla’s growing factories, which especially affects Gigafactory Berlin and Texas. In Germany, job postings were primarily for engineers. Tesla currently employs around 4,000 people in Germany and had planned to expand the workforce to 12,000 before the hire-stop announcement.
Tesla shares fell almost 10 per cent in US trade on Friday following the Reuters report. Tesla shares had already dropped at the end of April when Musk announced his plan to take over Twitter.
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