Tesla To Pause Hiring As Musk Plans To Cut 10% Of Staff

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Elon Musk Tesla NASDAQ:TSLA

Tesla Inc (NASDAQ:TSLA) employees have a reason to be concerned. An email from CEO Elon Musk reveals he thinks his company is over-staffed by 10%. This means that, to his eyes, out of the 99,290 employees, the car manufacturer should fire 10,000.

Plans

Musk bases this assertion because he has “a super bad feeling about the economic situation.”

When asked on social media about whether a recession was coming, he said: “Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.”

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The email sent to Tesla executives — as revealed by Reuters— had the subject “pause in hiring,” which means that any talent looking to land a job at the most valuable car manufacturing company in the stock market would have to look elsewhere.

Musk’s prediction about the economy comes at a time of great uncertainty for the U.S. The labor market is at full employment and it is hard to find workers in some sectors.

Interest rate hikes issued by the Federal Reserve threaten to drain growth, and high inflation —8.3% in April — stemming from high energy prices due to the war in Ukraine is also playing a role.

Salary increases to attract talent implemented by businesses are generating a price escalation that is wearing down the Biden Administration. This has prompted the President to try to pin it on Russia by repeatedly referring to it as “Putin’s inflation.”

Tough Stage

In this turbulent scenario, Musk does not see it all clearly. Although his company remains the largest capitalization in the entire sector, Tesla shares have fallen 30% in six months.

The corporate adventure that Musk has embarked on with the attempted purchase of the social network Twitter Inc (NYSE:TWTR) is also hurting Tesla.

This claim is based on the assumption that Musk could have to sell part of his stock in the company to accrue enough cash to fund the $44 billion acquisition —which is not at all clear at the moment.

In another email published this week, Musk warned his employees to spend at least 40 hours a week in the office.

“Everyone at Tesla is required to spend at least 40 hours a week in the office. If you don’t show up, we’ll assume you’ve resigned,” he wrote.