Musk seeks to cut 10 per cent of Tesla workforce

Company CEO says he has 'super bad feeling' about the economy

By AP

Published: Fri 3 Jun 2022, 8:27 PM

Tesla shares tumbled about 9% Friday on a report that CEO Elon Musk is considering laying off 10% of the company’s workers, as well as new questions from US regulators over complaints of the electric vehicles braking for no reason.

In an email Thursday to Tesla executives titled “pause all hiring worldwide,” Musk wrote that he had a “super bad feeling” about the economy and that the company needed to cut staff, Reuters reported.

Tesla had around 100,000 employees worldwide according to recent regulatory filings, including its subsidiaries.

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Tesla shares have lost nearly one-third of their value since early April, shortly after Musk first publicly floated the idea of buying Twitter.

Tesla shares fell $66 to $709 Friday. Shares were trading around $1,150 just two months ago.

President Joe Biden, while giving a speech on Friday’s jobs report in Rehoboth Beach, Delaware, was asked about Elon Musk saying he’s pessimistic about the US economy.

“While Elon Musk is talking about that, Ford is increasing their investment overwhelmingly and I think Ford is increasing the investment in building new electric vehicles,” Biden responded. “Six thousand new employees — union employees I might add — in the Midwest. The former Chrysler Corporation, Stellantis, they’re also making similar investments in electric vehicles. Intel’s adding 20,000 new jobs making computer chips. So, you know, lots of luck on his trip to the moon, I mean, I don’t know.”

Musk thanked Biden minutes later in a tweet.

Intel is building a $20 billion chip plant in Ohio which will employ about 3,000 people. Intel has said there will be about 7,000 construction jobs as well and thousands of additional technical jobs, plus indirect jobs in restaurants, health care, housing and entertainment.

There were other issues Friday that may have been weighing on Tesla’s stock.

Government regulators reported Friday that more than 750 Tesla owners have complained that cars operating on the automaker’s partially automated driving systems have suddenly stopped on roadways for no apparent reason.

The National Highway Traffic Safety Administration revealed the number in a detailed information request letter to Tesla that was posted on the agency’s website.

It’s the fourth formal investigation of the Texas automaker in the past three years, and NHTSA is supervising 23 Tesla recalls since January of 2021.