Its not news anymore. Layoffs are very much a general phenomenon in the post-COVID world, and none are immune to it. Tech companies and startups have seen the most of these, and Tesla is the latest to join in.
Multiple media reports suggest, that the Elon Musk-run electric carmakers is looking to fire several employees as its stock continues to crumble. This upcoming round of layoffs is said to be conducted in the upcoming fiscal quarter. To add to this, Tesla is reportedly planning to implement a hiring freeze (taking a page out of Meta’s book) and halt the recruitment of new blood in the company in the fiscal quarter starting next month.
It is not clarified whether the hiring freeze is for a more extended period of time or whether it is for some specific roles only.
If Tesla goes on to successfully enact the upcoming round of layoffs, then it will be the second one by the Texas-based automaker in recent months. In June, Tesla CEO Elon Musk said that he needed to downsize the automaker’s workforce by 10% (which will affect roughly 10,000 employees) because he had a “super bad feeling” about the economy.
And after being hit by a lawsuit by former employees, the billionaire dismissed the case and clarified that the company would reduce its salaried workforce by 10% in the next three months (thereby affecting around 3.5% of its overall workforce) and grow the number of hourly employees.
Tesla’s shares clocked a small rise of 1% in trading before the bell, and they currently hover at $137.57. This comes after it hit a two-year-low last week as its stock tumbled to $150.04 — its lowest since November 2020 — and since then, they have continued to take a hit.
Overall, the shares of the EV automaker have fallen by 65% this year owing to supply chain disruptions, and a fall in demand in China, and comes as Tesla investors continue to be wary of Musk’s management (or mismanagement, to be more precise) of social media platform Twitter. Musk later attributed the worsening fortune of Tesla to worsening economic trends, saying, “As bank savings account interest rates, which are guaranteed, start to approach stock market returns, which are not guaranteed, people will increasingly move their money out of stocks into cash, thus causing stocks to drop.”
It was Musk who was responsible for downsizing Twitter after his decisions saw numerous employees and executives leave Twitter, which led to the company shuttering its offices for a short while.
Musk’s actions also cost him his title as the richest person in the world as Tesla stocks continued to plunge (removing nearly $5 billion from his fortune) and he further alienated users, advertisers, and investors alike with his controversial and confusing policies at Twitter.