Tesla is reportedly going to cut its employee headcount by 10 percent, according to a new report from Reuters, CEO Elon Musk said in an email to executives. Musk reportedly has a “super bad feeling” about the economy, which could bring on a layoff of nearly 10,000 employees worldwide catalyzed by risky economic conditions, along with a hiring freeze.
Musk reportedly sent an email to company executives entitled, “pause all hiring worldwide” where the CEO described a hunch he had regarding poor economic conditions that could force the automaker to reduce its employee headcount.
There is no transcription or leak of the email itself. Reuters said it had seen the communication, where Musk stated he had a “super bad feeling” about current economic conditions. Usually, when recessions occur, employers consider temporary or permanent layoffs to stabilize budgetary requirements.
The email comes two days after Musk told employees company-wide that they would be required to spend 40 hours per week in a Tesla office and remote work would no longer be possible. Musk stated in a Tweet after the emails were released that people who wish to work from home can “pretend to work somewhere else.”
They should pretend to work somewhere else
— Elon Musk (@elonmusk) June 1, 2022
Tesla’s annual 10-K for 2021 showed the company employed 99,290 people at the end of the year. It was a substantial increase from 2020 numbers when the company only employed around 70,000 people.
Tesla shares dropped over 6 percent early in Friday’s trading session.
Interestingly, the automaker still has job postings listed on its website globally. Tesla maintains thousands of open positions on its Careers website, which has some people questioning the legitimacy of the email. Neither Tesla nor Musk have confirmed the communication is legitimate. However, the CEO has been active on Twitter after initial reports of the email began to circulate, and he has not challenged any coverage.
A hiring freeze and potential headcount reduction would bring even more challenges to Tesla as it has a growing order log for its vehicles but cannot keep up with supply as it continues to ramp manufacturing at several of its new facilities.
Disclosure: Joey Klender is a TSLA Shareholder.
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