Musk ‘Super Bad’ Feeling About Economy, Wants To Axe 10,000 Tesla Staff

The world’s richest man Elon Musk has weighed in on the state of the global economy, and indicated large scale job losses for Tesla staff in the months ahead.

In an email sent to Tesla executives that was seen by Reuters, Elon Musk has a “super bad feeling” about the economy and wants to cut about 10 percent of jobs at the electric carmaker.

The bad news comes just days after issued a series of no nonsense emails to all Tesla workers, telling them to return to the office full time or resign.

Tesla and SpaceX chief executive Elon Musk. Image credit: SpaceX

Pause all hiring

That blunt warning drew a backlash from a number of quarters, including Germany’s largest trade union, IG Metall which represents workers across automotive companies and other industrial sectors, which said it will support any employee who opposes Musk’s ultimatum.

Tesla currently has 4,000 staff in Germany, but this is expected to rise to 12,000 once its recently opened Giga Berlin factory achieves full production.

But Elon Musk is not backing down and Reuters reported on his email entitled “pause all hiring worldwide,” threatens thousands of jobs at Tesla.

Reuters reported that Tesla currently has 5,000 job listings on LinkedIn, covering a range of positions from sales in Tokyo; engineers in its new Berlin gigafactory; to deep learning scientists in Palo Alto.

The world’s most valuable carmaker employs roughly 100,000 staff, and a 10 percent workforce reduction could see as many as 10,000 people being let go.

And Musk’s warning of a potential recession, and the impact it will have on the car industry, is a notable prediction for a global economy facing many challenges.

But some observers feels that Musk’s talk about laying off thousands of staff is because he knows that a percentage of Tesla’s workforce will take part in the ‘great resignation’ and not return to the office.

“I think there’s potential that this is just a disguised layoff, meaning they’re able to get rid of people with attrition, or without having to actually have a layoff,” Reuters quoted Jason Stomel, founder of tech talent agency Cadre, as saying.

“(Musk) knows there’s a percentage of workers who are just not going to come back,” which Stomel said would be cheaper because no severance would be needed.

Skills shortages

Tesla is not the firm that is considering hiring freezes.

Last week a senior executive at Microsoft told his staff in a number of divisions to adopt a more conservative approach to hiring new people.

There are also media reports that other tech firms have quietly enacted hiring freezes.

That said however, last month a technology recruiter said that UK firms face increased pressure in hiring tech staff amidst a broader worker shortage.

The UK registered more job vacancies than unemployed workers for the first time on record in the first quarter of 2022, according to recent figures released by the Office of National Statistics (ONS).

The situation threatens to further drive up inflation, the Bank of England warned, as businesses may be forced to increase pay to attract workers, and then pass on their additional costs to consumers.

This situation is compounded for the tech industry by a skills shortage that has seen tech job vacancies rise by nearly 200 percent since 2020, according to figures from tech professional body BCS.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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