According to an internal email reviewed by Reuters, Elon Musk is considering a recruiting freeze and job cutbacks of up to 10% at Tesla because he has a “very awful feeling” about the economy.
Tesla now has roughly 5,000 job opportunities and 100,000 employees throughout the world. The email, with the subject line “stop all hiring worldwide,” was sent to Tesla executives late Thursday, just days after Musk ordered all staff to return to work for at least 40 hours a week or face instant termination.
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Tesla’s stock was down 3% after hours on the news
So far, demand for Tesla cars and other electric vehicles has not decreased. The customary signs of a downturn, such as rising dealer inventories and incentives in the United States, haven’t materialised.
Tesla’s stock, on the other hand, has been crushed, plunging 22% after Musk used his shares to fund a planned acquisition of Twitter, which now appears to have stalled. Concerns about the global economy, as well as the impact of China’s Covid-19 lockdown in Shanghai, where Tesla has manufacturing, have dragged on the stock price.
Some had speculated that Musk’s command to return to the office was a below-the-table effort to cut staffing levels. Tesla staff posted on message boards that their offices didn’t have the physical capacity to host all staff members full-time, after the rapid expansion during the pandemic, with one asking for advice on whether they should ignore the command or go in and work from the stairwell.
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“The more senior you are, the more visible must be your presence,” said Musk in the return-to-the-office email. “That is why I lived in the factory so much – so that those on the line could see me working alongside them. If I had not done that, Tesla would long ago have gone bankrupt.”
Musk’s email on job cuts came a day after the cryptocurrency exchange Coinbase announced a total hiring freeze and confirmed it would also be rescinding already-accepted job offers. “This is not a decision we make lightly, but is necessary to ensure we are only growing in the highest-priority areas,” LJ Brock, the company’s chief people officer, wrote in a blog post. “We always knew crypto would be volatile, but that volatility alongside larger economic factors may test the company, and us personally, in new ways.”