Tesla could freeze hiring and lay off 10% of its staff according to an internal email sent on June 2, signed Elon Musk and viewed by Reuters. The automaker’s chief executive reports having a ” very bad feeling on the global economic situation. His case is far from isolated.
Tesla cleans up
The title of the email to Tesla executives is self-explanatory, “ pause all hiring worldwide “. The message does not contain details of the sites or positions concerned. Before this text, Tesla offered around 5,000 job offers on Linkedin at its various locations around the globe.
Ford wants to sell its electric cars exclusively online
According to Tesla’s annual filing with the US stock market watchdog, the Securities and Exchange Commission (SEC), the company and its subsidiaries represented 100,000 employees at the end of 2021. Elon Musk in the same week had already announced to his employees that he dismiss without hesitation those who refuse to give up teleworking.
Tesla is used to massive layoffs, it’s almost a corporate culture: in October 2017, hundreds of employees lost their jobs, 9% of staff in June 2018, 7% in January 2019…
However, Elon Musk’s decision could have deeper springs, be linked to a general slowdown in the economy. The United States is experiencing the highest inflation in 40 years. A situation synonymous with an increase in the cost of living for Americans and by repercussion of a drop in consumption.
For now, Tesla is relatively untouched by these concerning signals. In the first quarter, the manufacturer recorded $3 billion in profits. However, this dynamic could be stalled. The company is struggling to restart production at its Shanghai factories, barely out of extremely strict confinement. Analysts are already predicting a decline in vehicle sales.
Dark clouds are gathering over the US economy
Elon Musk himself has already expressed his pessimism for the coming months. At a conference in Miami in mid-May, he said ” I think we are probably in a recession and this recession is going to get worse “. He joins the projections of Jamie Dimon and John Waldron, CEOs of JPMorgan & Chase and Goldman Sachs respectively. The first is particularly dark, “ a hurricane is rolling right over us “.
Tesla is just the latest in a long list of tech companies that have decided to freeze hiring or lay off staff. Meta, Microsoft, Coinbase, Snapchat, Uber suspended hiring. Netflix, PayPal, Peloton, have chosen to part ways with a number of employees.