Tesla stumbles on Wall Street after reports of possible workforce cut

Saying to have “a super bad feeling about the economy”his boss Elon Musk would have mentioned in an e-mail the need to cut 10,000 jobs.

Shares of electric car maker Tesla fell on Wall Street on Friday (June 3) after news reports of an email from Elon Musk mentioning the need to cut the company’s workforce by 10%. The title lost 4.9% around 1:00 p.m. GMT in electronic trading preceding the opening of the official session.

In a message sent Thursday to Tesla executives titled “suspend all hiring worldwide”Elon Musk says he has “a super bad feeling about the economy”, says the Reuters agency which consulted the email. According to its annual report, Tesla and its subsidiaries employed just over 100,000 people at the end of 2021. A reduction of 10% would therefore correspond to the elimination of around 10,000 jobs. The group did not immediately respond to a request from AFP.

An economic “hurricane” to come

The automaker again posted record results in the first quarter, benefiting from strong demand for its vehicles that the group is struggling to satisfy due to disruptions in the supply chain. But Tesla has recently faced several additional challenges: directly with the suspension of production at its Shanghai factory for several weeks due to the confinement imposed by the local authorities, and indirectly with the announcement by Elon Musk of his intention to take over. Twitter, perceived as a possible distraction.

Also shaken by the broader decline in the stock market, the builder’s stock has lost more than 30% since early April. For Dan Ives, Wedbush firm, Elon Musk “trying to get ahead of the fact that deliveries will not increase as much as expected this year and to preserve the group’s margins before an economic slowdown”. Several leaders of large companies have recently expressed their concerns about the economic situation. Jamie Dimon, CEO of JPMorgan Chase, said Wednesday that investors should prepare for an economic “hurricane”, although it is still difficult to predict whether it will be a minor hurricane or a mega storm.


Leave a Comment