2022 has not been the best year for global economy. And not just for the common 9-to-5 worker, or a small scale industrialist, or a venture capital backed startup founder, but even the biggest corporates of the world. Elon Musk, owner of a few of those big corporates, has directed executives at Tesla Motors to cessate hiring worldwide in a leaked email.
The email, titled “Pause all hiring worldwide”, first reviewed by Reuters, has cited Musk’s “Super bad feeling” about the global economy. And this sentiment has been earlier echoed by other renowned executives like JPMorgan Chase Co CEO Jamie Dimon and Goldman Sachs President John Waldron. “A hurricane is right out there down the road coming our way,” Dimon said. Musk’s word holds considerable weight, and is expected to cause serious panic.
In another email sent to Tesla executives on Friday, Musk asked them to cut salaried headcount by 10% in certain areas which are overstaffed. Musk clarified that the hourly headcounts will increase and that “this does not apply to anyone actually building cars, battery packs or installing solar.”
Tesla’s workforce was about 100,000-strong in 2021, as per the company’s annual SEC filing. Before this warning, Tesla had about 5,000 job postings live on LinkedIn, for sales in Tokyo, Engineers at its new Berlin factory and deep learning scientists in Palo Alto.
Musk had earlier expressed his fears of an upcoming recession. US President Joe Biden (Who has not been Tesla’s biggest supporter), did not share the same sentiment, stating examples of Tesla’s competitors. “While Elon Musk is talking about that, Ford is increasing its investment overwhelming. So, lots of luck on his trip to the moon, I don’t know,” said Biden. President Biden added that Ford was hiring more than 6,000 union workers at its U.S. factories. Elon Musk, being Elon Musk, retorted with a tweet saying “Thanks Mr. President!”, along with a link reporting NASA choosing Tesla for the next manned mission to the moon.
The leaked emails recieved an expected response from the market, as Tesla’s shares fell by 9% following the report. In another leaked email sent to employees on Tuesday, titled “To be super clear”, Musk said that the company will not be allowing the option of working remotely. “Everyone at Tesla is required to spend a minimum of 40 hours in the office per week. Moreover, the office must be where your actual colleagues are located, not some remote pseudo office. If you don’t show up, we will assume you have resigned,” Musk said in the email. He added, “The more senior you are, the more visible must be your presence.”
Musk’s ultimatum of 40-hour work weeks has faced resistance from Tesla’s workers in Germany, who happen to be the only part of Tesla’s workforce unionized with the IG Metall worker’s union. Whoever does not agree with such one-sided demands and wants to stand against them has the power of unions behind them in Germany, as per law,” Birgit Dietze, the district leader for IG Metall in Berlin-Brandenburg-Sachsen, said. Tesla employees 4,000 people in Berlin.
Tesla has been under the hammer recently. It has been playing the role of collateral damage from all the fall out of Musk’s twitter acquisition. The share prices have been plummeting. With a COVID-19 lockdown in Shanghai, one of Tesla’s largest manufacturing units located there has been out of production. While Tesla’s hiring has put on the brakes hard, Musk seems to be thriving in the face of recession. In a statement, he said that recessions are vital for economic cleansing. Replying to a Twitter user, he said that the recession “is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.”