Reuters: ‘I have a very bad feeling about the economy’, says Musk – 10% of Tesla’s potential to be laid off

LAST UPDATE 14:00

Tesla CEO Elon Musk said the electric car maker needed to cut staff by 10%, according to an email sent to its executives, which was taken over by Reuters.

“I have a very bad feeling about the economy,” he said in an email titled “All Hiring in the World Stops”.

The message comes two days after the billionaire told his staff to return to work or resign, and is added to a series of warnings from entrepreneurs about the risk of recession.

Tesla at the end of 2021, employed about 100,000 people in the company and its subsidiaries at the end of 2021, according to data from the Hellenic Capital Market Commission.

The company’s share is already falling 3% in pre-conference trading in the US and its share in Germany is falling 3.6%.

Musk has warned in recent days of the danger of a recession, but his email, which signaled a freeze on staffing and layoffs, was the most immediate and high-profile message of its kind from the head of an automotive industry.

So far, demand for Tesla cars and other electric vehicles has remained strong and many of the traditional recession rates have not been met (such as increased dealership stocks and incentives to buy cars in the US).

However, Tesla is finding it difficult to restart production at its Shanghai plant following restrictions imposed by the coronavirus, which led to a mandatory shutdown of the plant.

“Musk’s bad feeling is felt by many people,” said Carsten Brzeski, head of macroeconomic analysis at ING.

“But we are not talking about a global recession. We expect the global economy to slow towards the end of the year. The US will slow down while China and Europe are not going to recover,” he added.