Elon Musk who is the Tesla CEO has ordered a pause in hiring in all Tesla factories worldwide, as he also planned to do away with about 10% of the salaried staff.
A message sent to executives on Thursday laid out his concerns, his “super bad feeling” about the economy.
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. read more
“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.
So far, demand for Tesla cars and other electric vehicles (EV) has remained strong and many traditional indicators of a downturn – including increasing dealer inventories and incentives in the United States – have not materialised.
But Tesla has struggled to restart production at its Shanghai factory after COVID-19 lockdowns forced costly outages.
