SAN FRANCISCO, June 05(ABC): Tesla (TSLA.O) CEO Elon Musk has a “super bad feeling” about the economy and needs to cut about 10% of salaried staff at the electric carmaker, he said in emails seen by Reuters.
A message sent to executives on Thursday laid out his concerns and told them to “pause all hiring worldwide.” The dire outlook came two days after the billionaire told staff to return to the workplace or leave and adds to a growing chorus of warnings from business leaders about the risks of recession.
Tesla shares fell 9% in U.S. trade on Friday after the Reuters report. The tech-heavy Nasdaq (.IXIC) was down about 2%.
In another email to employees on Friday, Musk said Tesla will be reducing salaried headcount by 10%, as it has become “overstaffed in many areas.” But “hourly headcount will increase,” he said.
“Note, this does not apply to anyone actually building cars, battery packs or installing solar,” Musk wrote in the email seen by Reuters.
Almost 100,000 people were employed at Tesla and its subsidiaries at the end of 2021, its annual SEC filing showed. It did not break down numbers of salaried and hourly workers.
The Texas-based company was not immediately available for comment.
Musk has warned in recent weeks about the risks of recession, but his email ordering a hiring freeze and staff cuts was the most direct and high-profile message of its kind from the head of an automaker, with others describing sky high demand
“Elon Musk has a uniquely informed insight into the global economy. We believe that a message from him would carry high credibility,” Adam Jonas, an analyst Morgan Stanley, said in a report.