Elon Musk to Cut 10% of Tesla's Employment

The CEO of Tesla Elon Musk, called for reducing the company's white collar employment by 10% as a confirmation of the email cited by Reuters early his month, media agencies reported on Saturday.

Musk said: “Tesla will be reducing salaried head count by 10 percent, as we have become overstaffed in many areas,” Musk stated, in addition, the number of hourly employees would increase.

In a previous email revealed by Reuters, the chairman ordered pausing hiring worldwide,” explaining that he experienced a “super-bad feeling” about the future of the economy.

Shortly, Musk later stated on Twitter that a “total headcount will increase, but salaried should be fairly flat,” before confirming that the plan for the upcoming cuts..

According to Wall Street Journal, Tesla canceled several virtual jobs which were supposed to take place in China in the upcoming weeks.

Last week, the Chairman of Tesla and SpaceX lost $16.6 billion after the shares of Tesla dropped by 9%.

The fall of Tesla shares came after Reuters cited an email sent by Musk to the executives of Tesla company asking them to suspend hiring worldwide and work to decrease the employment by 10% due to concerns over the economy in the US.

The report added that Musk informed all directors to pause all hiring worldwide. This directive order came two days after Tesla’s Chief demands to his working teams to return to the office or leave.

The shares of the car making company dropped by 3% in the markets on Friday in the US, and by 3.5 in Frankfurt, Germany stocks by 3.6.

Although the demands for electric vehicles are still strong around the world, Tesla still has issues with starting production in its Shanghai factory.

Carsten Brzeski, a researcher at one of the leading Duch banks, told Business Standard: “Musk’s bad feeling is shared by many people.”

Brzeski added: “But we are not talking about a global recession. We expect a cooling of the global economy towards the end of the year. The U.S. will cool off, while China and Europe are not going to rebound.”