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In anticipation of the US downturn, Elon Musk describes cuts in Tesla employees




DOHA, June 21 (Reuters) – Elon Musk, CEO of Tesla (TSLA.O), said a 10% cut in salaried employees at the electric car maker would take place over three months, as the world’s richest man predicted a US recession was more likely than not.

His remarks were his most detailed explanation of the plans for job cuts and his first personal appearance since Reuters reported earlier this month that the company needed to cut employees by about 1[ads1]0% and stopped hiring worldwide.

In a speech at the Qatar Economic Forum organized by Bloomberg, Musk said the cuts would only apply to paid workers, meaning a 3.5% reduction in the total number of employees, changes he described as “non-material”.

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But he expressed concern about the prospect of a US recession.

“It’s not certain, but it seems more likely than not,” he said.

Musk’s prospects reflect comments from executives, including JPMorgan Chase & Co chief Jamie Dimon and Goldman Sachs president John Waldron. A “hurricane is right out there down the road coming our way,” Dimon said earlier this month.

Whether the United States will go into recession has been a growing concern for top executives, the Federal Reserve and the Biden administration.

US President Joe Biden reiterated on Monday that he felt a US recession was not inevitable, even as the world’s largest economy struggles to cope with sky-high petrol prices and inflation, which is at its highest in 40 years.

Former US Treasury Secretary Lawrence Summers told NBC News on Sunday that he expected a recession.

In an email on June 2, seen by Reuters, Musk told Tesla executives that he had a “super bad feeling” about the economy and that the company had to cut employees by about 10% and “stop all employment worldwide”.

He said on Tuesday that Tesla expected to increase the number of workers paid per hour as opposed to fixed wages.

Elon Musk arrives at the Met Gala In America: An Anthology of Fashion theme at the Metropolitan Museum of Art in New York City, New York, USA, May 2, 2022. REUTERS / Andrew Kelly

He also said he stuck to digital currency and intended to personally support dogecoin.

Digital currency has been extremely volatile this year, but bitcoin increased after Tesla’s announcement in February last year that they had bought $ 1.5 billion of the currency and for a short time accepted it as payment for vehicles.

‘VERY SIGNIFICANT MATTER’ UNSOLVED ON THE TWITTER AGREEMENT

Elon Musk also talked about his bid to buy Twitter (TWTR.N), which Forbes magazine reported earlier this month that he had agreed to buy for $ 44 billion.

Musk said there were unresolved issues, including the debt portion of the deal and the number of spam users.

“We are still waiting for a solution to that issue, and it is a very important issue,” he said, reiterating Twitter’s claims that fake accounts or spam accounts represented less than 5% of the daily active users who can earn money.

“And then of course there is the question of, will the debt part of the round come together? And then the shareholders will vote in favor?”

Musk said he wants to get 80% of North America and half the world on Twitter.

“My ambition for Twitter is to be as inclusive as possible,” he said.

The most important thing was to take the company in the right direction, as with his private rocket companies SpaceX and Tesla, he said.

“Being CEO is much less important than my ability to drive the product in the right direction,” he said.

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Additional reporting by Nadine Awadalla in Dubai and Hyunjoo Jin in San Francisco; Written by Saeed Azhar; editing by Jason Neely and Barbara Lewis

Our standards: Thomson Reuters Trust Principles.



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