Although the electric carmaker has had rapid growth in recent years, its CEO, Elon Musk, appears to be concerned about the economy’s slowing.
Elon Musk, Tesla’s CEO, said in an email to employees on Friday that he expects to slash 10% of the company’s paid workforce.
Employees who construct cars, batteries, or solar panels will not be affected by the job losses, and the number of hourly employees will expand, according to Mr. Musk in an email obtained by The New York Times. “Tesla will be decreasing salaried headcount by 10%,” he added, adding that “we have grown overstaffed in several areas.”
The revelation was first reported by Reuters, which cited a separate email written by Mr. Musk to Tesla executives.
Following the publication of that piece, the automaker’s stock price dropped by roughly 9% on Friday.
Tesla’s workforce has risen significantly as sales have increased, and the company has created new plants, including two this year near Berlin and Austin, Texas. At the end of last year, the corporation employed almost 99,000 people. Tesla had 48,000 just two years ago.
Requests for response from Mr. Musk and Tesla were not returned.
Mr. Musk told Tesla and SpaceX employees earlier this week that they can expect to spend at least 40 hours per week at their workplaces.
Mr. Musk said in an email to SpaceX staff on Tuesday, “The more senior you are, the more apparent your presence must be.” “I spent so much time at the plant because I wanted folks on the line to see me working alongside them.” SpaceX would have gone bankrupt long ago if I hadn’t done it.”
That declaration sparked a fierce debate among Mr. Musk’s firms about the best way to restore normalcy after the pandemic’s two years of chaos. It also raised concerns that he would drive away high achievers who want to work from home part-time or full-time.
Tesla’s new layoffs will not be the first. In 2017 and 2018, the automaker laid off several employees.
Investors have began to criticise the company’s exorbitant stock price in recent weeks. The corporation is valued at more than $728 billion by the market, which is more than numerous other significant automakers combined. Tesla’s stock is down around 40% from its all-time high at the end of last year, highlighting the dangers the firm confronts from increased competition, racial discrimination allegations, and production issues at its Shanghai facility.
Some critics see Mr. Musk’s attempt to purchase Twitter as just another distraction that could harm Tesla. Some investors are concerned that the automaker’s board lacks sufficient independence from the CEO to serve as a check on him and his whims.