Musk has ‘super bad feeling’ about the economy

Nearly 100,000 people were employed at Tesla and its subsidiaries at the end of 2021 (Credit: Archive/Reuters)

SAN FRANCISCO (Reuters) – Tesla Chief Executive Elon Musk has a “super bad feeling” about the economy and needs to cut about 10% of jobs at the electric car maker, the billionaire said in an email. to company executives.

The message, sent on Thursday and titled “Pause All Hiring Worldwide,” came two days after Musk told employees to return to work or resign, and it adds to a growing chorus of warnings. from business leaders about recession risks.

Nearly 100,000 people were employed at Tesla and its subsidiaries at the end of 2021, according to the company’s annual filing with the US Securities and Exchange Commission.

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The company was not immediately available for comment.

Tesla shares tumbled nearly 3% premarket in the US on Friday and its Frankfurt-listed shares tumbled 3.6% after the Reuters report. Nasdaq futures were down 0.6%.

Musk has warned in recent weeks of recession risks, but his email ordering a hiring freeze and staff cuts was the most direct message from an automaker boss.

So far, demand for Tesla cars and other electric vehicles has remained strong and many traditional indicators of a slowdown, including rising US dealer inventories, have not materialised.

“Musk’s bad feeling is shared by many people,” said Carsten Brzeski, global head of macroeconomic research at Dutch bank ING. “But we are not talking about a global recession. We expect the global economy to cool down at the end of the year. The US will slow down, while China and Europe will not recover.”

“You can’t just fire Dutch workers,” said FNV union spokesman Hans Walthie, adding that Tesla would have to negotiate with a group of workers the terms of any exit. Tesla’s European headquarters are in the Netherlands.

Musk said Tuesday in an email that Tesla employees needed to be in the office a minimum of 40 hours a week, closing the door on any remote work. “If you don’t show up, let’s assume you quit,” he said.

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