World’s Richest Billionaire, Elon Musk wants to sack 10% of his workers at his electric vehicle company, Tesla.
This amounts to about 10,000 workers from Tesla’s payroll.
He said he has a “super bad feelings about the economy.”
Consequently, the Tesla CEO sent emails to executive members of the company calling for a halt in employment of new talents.
Currently, the electric car maker, Tesla, has about 100,000 staff worldwide.
Also, Tesla currently has about 5000 job vacancies which the company advertises worldwide.
Late Thursday, Musk sent out the emails to Tesla executives.
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The emails arrived with the subject line “pause all hiring worldwide.”
This is coming just days after Elon Musk told employees that they would be sacked if they don’t return to the office for at least 40 hours a week.
Elon Musk Threatens Workers With Sack unless They’re present At Offices:
In a series of memos to staff, Musk had warned that all workers must resume fully and not work remotely.
He had also mandated that every staff member at Tesla must spend at least a minimum of 40 hours per week at Tesla offices.
He equally directed that every worker must resume at not a branch office of the company but where such a worker’s working colleagues also work.
This is coming on the backdrop of many company workers relocating to different locations away from the location of the companies they work for, as a result of remote working.
However, Musk who came hard against such developments, warned that any staff member who fails to resume physically will be sacked.
He said the company would assume a worker had resigned if such a staff member does not report or resume where he or she is suppose to.
Why Musk Want’s Job Cuts:
Musk did not elaborate on his reasons for wanting to sack about 10, 000 employees.
However, he complained last month that the U.S. was “probably” already in a recession that may last as long as 18 months.
He blamed the Joe Biden-led government for feeding inflation through stimulus measures.
Adding to Musk’s fears for Tesla stock, the National Highway Traffic Safety Administration, on Friday, said more than 750 Tesla owners “have complained about their vehicles suddenly braking at high speeds—more than double the number the regulatory agency, which is probing Tesla over its autopilot feature, disclosed in February,” Reported Forbes.
Passed a stalled @Tesla on the way to work. Well that escalated quickly! @elonmusk how does this happen?#fire #error #electricvehicles #Elon #batteries pic.twitter.com/IK8inNB1Ft
— SOV Distillery (@SonsofVancouver) May 21, 2022
Similarly, on Friday, Cowen analyst, Jeffrey Osborne, projected a fall in Tesla shares from $790 to $700.
The analyst equally hinted that he expects Tesla will face challenges in achieving its production targets for the second quarter.
He gave reasons for this as being the current pandemic lockdown in China which he said will affect Tesla’s car production drastically.
Implications:
Meanwhile, anxiety grows especially for Tesla following China’s Covid-19 lockdown in Shanghai where Tesla has its factory.
The lockdowns have weighed down on the company’s share price, sending jitters to Musk.
Consequently, the billionaire looks at job cut to cushion the imminent impact.
As at Tuesday, Tesla shares fell 9% to below $704.
This is a bearish turn of more than 40% from its all-time high in November.
The fall in share value wiped about $75 billion from Tesla’s market capitalization.
The company’s market cap now stands at $728 billion.
Meanwhile, although Tesla’s stocks was down by 3% after Elon Musk’s tweet, you must know that demands for Tesla cars have not fallen.
So, despite the complaints from some drivers, demands for Tesla cars are not down.
However, Tesla’s stock generally has gone bearish.
It has fallen 22% since the billionaire used his shares to finance a planned acquisition of Twitter.
Although he is in talks with Twitter’s board to buy the micro-blogging site.
However, the deal is on pause following claims and counter claims about too many bot or fake Twitter accounts.
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