Elon Musk issues hiring freeze at Tesla and also cuts staffing by 10 percent

Musk claims he has a “super bad feeling” about the economy, leading to cuts and a pause in hiring

This week, Tesla CEO Elon Musk sent an email to company execs, informing them that the company is pausing hiring worldwide. Additionally, due to having a “super bad feeling” about the economy, Musk told Tesla’s executive team to cut its staff by 10 percent.

Based on 2021 filings, Tesla has a global workforce of 99,290 employees. A cut of 10 percent is fairly significant. However, Musk and Tesla are no strangers to layoffs. It was only just recently that Musk sent executives another email claiming “remote work is no longer acceptable.” Any employees not in the office, working 40 hours a week are to be let go.

Musk cites his feelings about the economy as the reasoning behind the freeze and layoffs. That said, earlier this year, Tesla expected to increase vehicle deliveries by 50 percent year-over-year thanks to demand. In 2021, the company’s sales also increased by 71 percent to $53.8 billion USD (roughly $67.5 billion CAD). It’s also noted that Tesla reported over $3 billion (roughly 3.765 billion CAD) in profit in its first quarter of this year. However, COVID-19 lockdowns have played a role in shutdowns at Tesla’s gigafactory in China. This, in turn, is impacting the company’s deliveries this month.

There’s no word on which departments are being affected by the layoffs.

This news also comes at a time when Musk himself is in the midst of purchasing Twitter. The transaction is set with a value of $44 billion USD (about $56 billion CAD). Musk is reportedly completing the deal with the Royal Bank of Canada and the Canadian Imperial Bank of Commerce assistance. The two are lending Musk a total of $1.15 billion USD ($1.46 billion CAD) in low-cost debt loans.

Source: Reuters Via: The Verge