Tesla boss Elon Musk expresses fear of a recession and therefore probably wants to cut thousands of jobs at the electric car manufacturer. In an internal email to executives Thursday, available to Reuters news agency, Musk writes that he has a “super bad feeling” about economic development. The American company must therefore reduce its workforce by around ten percent. The e-mail was headed “Recruitment freeze”. Tesla could not immediately be reached for comment.
After the report on possible job cuts, Tesla’s share price came under significant pressure, it fell by more than 4 percent on the Xetra system back below 700 euros. Most recently, the titles had recovered significantly from their low since summer 2021 at around 580 euros.
At the end of 2021, Tesla employed approximately 100,000 people around the world. The carmaker is currently ramping up production at its new plant in Grünheide near Berlin and has advertised hundreds of jobs around the world on the LinkedIn job platform, there are around 5,000 open jobs, from salespeople in Tokyo to mechatronics technicians in Berlin and IT specialists in Palo Alto.
Musk calls back to the office
It was only on Wednesday that Musk had warned all of the group’s employees to return to the office from their home office. Working from home is only acceptable if you have already been in the office at least 40 hours a week. “The higher your position, the more visible you need to be,” Musk wrote. “That’s why I lived in the factory so often so the employees could see me working alongside them. If I hadn’t done that, Tesla would have been bankrupt long ago.”
If someone doesn’t show up, “we have to assume that person has left the company,” the letter said without a friendly salutation, with the subject line “to be super clear.” On Twitter, Musk exchanged blows with Australian billionaire Scot Farquhar, who described the appointment back to the office as “something from the 1950s”. The Tesla boss responded: “Recessions perform an important economic cleansing function.”
Musk is the first auto executive to express concern about the economy. The industry is currently benefiting from high global demand for new and used cars, also due to the fact that production has been under pressure since 2020 due to chip bottlenecks or lockdowns. In the first quarter, Tesla delivered 310,048 vehicles, the highest number ever, and sales soared 70 percent to $18.8 billion. However, production fell behind the previous quarter. Tesla had to temporarily close its plant in Shanghai due to the corona lockdown and is currently struggling to restart production.
Most recently, several senior company bosses in the USA had expressed concern about economic development. Jamie Dimon, chief executive of investment bank JP Morgan, said this week a “hurricane is on its way.” Inflation in the US is currently at its highest level in 40 years. The US Federal Reserve is faced with the task of getting inflation under control again without plunging the country into a recession.
“The bad feeling that Musk has is shared by a lot of people,” said Carsten Brzeski, an analyst at Dutch bank ING. “But we’re not talking about a global recession. We expect the global economy to cool off towards the end of the year.”