Elon Musk Backpedals Tesla Workforce Slashing Comments

Mandatory Credit: Photo by David Fisher/Shutterstock (12921810fm)Elon MuskCostume Institute Benefit celebrating the opening of In America: An Anthology of Fashion, Arrivals, The Metropolitan Museum of Art, New York, USA - 02 May 2022.
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Elon Musk seemed to try to assuage investors’ anxiety over the weekend, following his leaked emails about slashing Tesla’s workforce, which sent the stock nosediving on June 3, closing down 9.22%.

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On June 4, Musk tweeted that “total headcount will increase, but salaried should be fairly flat.”

This was just two days after Musk sent a series of emails telling his Tesla executive staff they couldn’t work from home anymore. Then the richest man on the planet announced he would need to cut about 10% of jobs at the company, GOBankingRates reported.

Musk said he had a “super bad feeling” about the economy, according to an internal email to executives obtained by Reuters and titled “pause all hiring worldwide.”

“Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas. Note, this does not apply to anyone actually building cars, battery packs or installing sloe. Hourly headcount will increase,” the memo, posted on Twitter by The Future Fund managing partner and co-founder Gary Black, reads.

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As of December 31, 2021, Tesla had 99,290 employees, according to its annual report. 

Shares of Tesla — which have been struggling since the $44 billion Twitter acquisition was announced in April – were up 2.98% in pre-market trading on June 6.

Edward Moya, senior market analyst, The Americas OANDA, wrote in a note sent to GOBankingRates on June 3 that “Wall Street is not used to hearing from CEOs that are straight shooters, so Musk’s warning carries a lot of weight.”

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“Commodity prices are not easing fast enough, China’s COVID situation will likely linger, and a weaker consumer will hurt demand for new cars.  If Tesla is worried about their outlook, that means the other large car manufacturers are in bigger trouble,” Moya said. “Tesla could be vulnerable to a retest of the May lows, but that will likely be a buying opportunity.  Tesla will still remain a buy for many on Wall Street as they are still the EV king, energy prices are not coming down anytime soon, and a stock-split is likely coming for retail traders.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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