What just happened? Elon Musk can't stay out of the news headlines these days, but that's what comes from being the world's richest person and (probably) Twitter's future owner. On this occasion, reports say the CEO has paused all hiring at Tesla and wants to cut employee numbers by 10%. The reason? He has a "super bad feeling" about the economy.
Reuters writes that Musk sent the ominous warning in an email titled "pause all hiring worldwide" to Tesla executives. The automaker and its subsidiaries employed around 100,000 at the end of 2021, according to an SEC filing, so a 10% reduction in its workforce would represent a substantial number of layoffs.
Coincidentally, or perhaps not, the email arrived just two days after another of Musk's internal emails demanded that all SpaceX and Tesla employees spend a minimum of 40 hours in the office, adding that anyone who doesn't show up will have presumably resigned. It's led to one of his many Twitter spats, this one with Scott Farquhar, the CEO and co-maker of Atlassian. It comes after a round of insults with Dogecoin co-creator Jackson Palmer, who called Musk a "grifter."
News from @elonmusk & @tesla today feels like something out of the 1950s: "Everyone at Tesla is required to spend a minimum of 40 hours in the office per week". Very different approach to what we are taking at Atlassian and here's why. 🧵 (1/5)— Scott Farquhar (@scottfarkas) June 2, 2022
Musk's recession warning arrives as inflation hits a 40-year high that has pushed up the cost of living, slowing consumer spending and sales; consumer prices were 8.3% higher in April than a year earlier. There are also China's Covid restrictions impacting production and the Russia/Ukraine war, which continues to disrupt the global economy and skyrocket gas prices.
Tesla had about 5,000 job postings on LinkedIn prior to the email, ranging from sales personnel to engineers in locations covering Berlin, Tokyo, and Paulo Alto.
😉— Elon Musk (@elonmusk) June 2, 2022
Musk previously warned of a recession on Twitter. Asked by a user if one was on its way, he said, "Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen."