Tesla and SpaceX’s CEO Elon Musk has a ‘super bad feeling’ for the world economy at the moment. As a result, he feels that the right move to do now is to cut about 10% of the staff in his companies.
At the moment Elon Musk hasn’t started the cutting process yet. However, reaching that point in the very near future is inevitable. In a message to the executives of the company, the billionaire asks for an immediate stoppage of all hiring in his factories worldwide. Furthermore, he asks for all Tesla and SpaceX employees to return to their offices. He proclaims an end to the remote work. Want to get paid – get back in the office.
Elon Musk Is Worried About The Global Economy While Ford Increases Investments – Joe Biden Counters Elon’s Opinions
This stopping of remote work faces great resistance in the Netherlands, where Tesla’s European headquarters are. Hans Walthie, states that you cannot just fire Dutch workers. In order to say that you will fire someone based on his appearance in the office, you will need to undergo some negotiations with labor unions in the Netherlands.
Regarding the pause on hiring, the world faces a contradictory situation. While Elon Musk announces that he pauses new employment, there are about 5000 active job postings on LinkedIn for Tesla all over the world. Many work positions remain open in the company. Engineers are needed in Giga Factory in Berlin and in Palo Alto, salespersons in Tokyo, and the list goes on.
According to critics, among which Jason Stomel, the founder of tech talent agency Cadre, this return-to-office demand by Elon is just a shortcut to get people to leave the company without paying severance.
Elon points out the risk of a recession on many occasions. There is a global recession worldwide, and that is something that we cannot get out of so easily. The recession is evident and is happening as we speak, and as you read this article. Tesla shares alone, go through a fall of about 9% in the U.S trade on Friday.
According to Musk, Tesla has become overstaffed many years ago, but nothing was taken as a measure to solve this issue until now. Now is the time to address it and make something about it. Of course, if the ‘lazy employees’ do not recognize themselves and don’t do something about it, he will take the matter into his own hands. That can mean only one thing. Letting go of people – firing them.
In another email to the executives of the company, Elon reveals his plans for the near future of Tesla. He says that his plan is to let go around 10% of the staff of the company. But all this, while not lowering the monthly expenses of the company. Or in other words, he will let go 10% of the staff while introducing a global raise of about 10% for all employees worldwide. Of course, to the ones that agree to return to the office.
Elon tweets numerous times about the global recession and the hiring freeze, as well as for the need of lowering staff numbers. However, this email that he sends to the executives is the most serious sign that this might actually happen.
On the other side, Tesla’s demands and orders remain stable over the whole period. In fact, car manufacturers report a skyrocketing demand in the past period. So high actually, that they cannot reach it.
But Tesla faces a great problem. So great, in fact, that might be the cause for all these warnings and measures that Elon as a CEO takes. After the lockdown in Shanghai, Tesla Company is struggling to re-open and restart the production after the outages that cost the company greatly.
“It is always better to introduce austerity measures in good times than in bad times. I see the statements as a forewarning and a precautionary measure.” – a NordLB analyst Frank Schwope says.
And these are most certainly good times for Tesla. With the demands booming and with the restoration of the production in Shanghai, nothing stands in the way of success for the wealthiest person in the world.
Joe Biden, the US President releases a statement in response to the worrying thoughts that Elon Musk has lately. Last Friday, the 3rd of June, the American president counters Elon’s doubts about the US economy. Furthermore, he wishes him ‘lots of luck on his trip to the moon’.
The President states that the USA achieved ‘the most robust recovery in modern history’ with the almost 9 million new jobs that appear on the offers since he is in office. Moreover, the unemployment rate stays steadily at 3.6% which is relatively good, and the best situation since the COVID 19 pandemic took over in 2019.
President Joe Biden’s views on the situation are not so tragic as the ones from Elon. Even when the Electric vehicles economy is in question. He counters Elon’s statement by putting out Ford’s increasing investment in employees and electric vehicles in general.
“While Elon Musk is talking about that, Ford is increasing their investment overwhelmingly.” –President Biden says.
“I think Ford is increasing investment in building new electric vehicles, 6,000 new employees, union employees I might add, in the Midwest.”
President Joe Biden also points out other companies’ investments in the area of electric vehicles. He mentions Chrysler and its parent corporation Stellantis.
“The former Crysler Corporation, Stellantis, they are also making similar investments in electric vehicles. Intel is adding 20,000 new jobs for making computer chips,” President Biden says. “So, you know, lots of luck on his trip to the moon.”
To this Elon doesn’t remain silent as well. As soon as Forbes’s Twitter account shares the video of Biden making the statement he retweets – “Thanks, Mr. President!”
What do you think? Will Elon succeed in his dream to visit Mars? Are we witnessing the start of the fall of Tesla, the EV giant? Let us know in the comments.
