Elon Musk Mulls Slashing 10% of Workforce, Cites Gloomy Economic Outlook

Tesla (NASDAQ: TSLA) CEO Elon Musk is feeling a looming chill in the economy and is proposing slashing 10% of his workforce.

In his most direct signaling yet, Musk says he has a “super bad feeling” about the economy, and as a result is planning on reducing his staff count. According to Reuters, which cited an internal email sent to Tesla’s executives, the entrepreneur is ordering a a hiring freeze and employee cutbacks, merely two days after instructing workers to return to their offices or lose their positions.

Latest SEC filings show that Tesla and its subsidiaries had about 100,000 employees as of December 2021, and had about 5,000 job postings on LinkedIn prior to Musk’s gloomy message. The billionaire failed to provide further details into his reasoning, and it remains unknown what implications his sudden shift in sentiment would have on his pending takeover of Twitter.

For the time being, demand for Tesla’s have been robust, while indicators of a potential recession— such as rising inventories at dealerships and improved incentives— have not come to fruition. However, Tesla’s Shanghai factory has been slow to resume production after local Covid-19 lockdowns cut output. “Musk’s bad feeling is shared by many people,” said ING head of macroeconomic research Carsten Brzeski. “But we are not talking about global recession. We expect a cooling of the global economy towards the end of the year. The U.S. will cool off, while China and Europe are not going to rebound.”

Conversely, though, it appears that other legacy automakers are not feeling the same sentiment as Musk. Ford CEO Jim Farley on Thursday announced that the automaker will be opening up over 6,000 new manufacturing jobs, and earmarking $3.7 billion in investments at the company’s Michigan, Ohio, and Missouri factories.

Information for this briefing was found via Reuters and Twitter. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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