Tesla plans to cut down about 10 percent of jobs, according to its CEO Elon Musk who said he has a “super bad feeling” about the economy. The update came in an email he sent to his employees demanding that they return to the workplace or resign from their jobs.
It’s no news that macroeconomic challenges are setting in and forcing companies across the globe to take on new decisions with many of them pausing hiring of new talents. According to the company’s annual SEC filing, it employed around 100,000 people in the company and its subsidiaries at the end of 2021.
Elon Musk’s warning about a potential recession is the latest in a string of warnings for automakers. Although worries about a potential recession continue to increase, the demand for Tesla vehicles, as well as that of other automakers has remained strong. It is important to note that the factors that signal this downturn being anticipated are yet to take effect in the US…but that doesn’t mean they cannot happen.
Tesla’s Shanghai factory is still struggling to continue production as a resurgence in Covid-19 cases has forced lockdowns which continue to be detrimental to this production facility and the company.
Prior to Elon Musk’s latest warning, Tesla had around 5,000 job postings on LinkedIn. These postings entailed roles from sales in Tokyo and deep-learning scientists in Palo Alto to engineers in its recently launched Berlin gigafactory.
Elon Musk’s order that staff must return to the office has caused quite an uproar in Germany. In the email sent to employees on Tuesday, Elon Musk wrote that “Everyone at Tesla is required to spend a minimum of 40 hours in the office per week. If you don’t show up, we will assume you have resigned.”
Commenting on the development, Jason Stomel, the founder of tech talent agency Cadre said that “I think there’s potential that this is just a disguised layoff, meaning they’re able to get rid of people with attrition, or without having to actually have a layoff.” According to him, Elon Musk knows there’s a percentage of workers who are just not going to come back,” and this would be cheaper than providing laid-off workers with severance packages.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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