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Why does Elon Musk reportedly want to lay off 10% of Tesla employees?

The Tesla CEO told executive that he has a “super bad” feeling about the economy and warned that the company has become “overstaffed in many areas.”

Update:
Elon Musk to lay off 10% of Tesla staff
MIKE BLAKEREUTERS

Tesla CEO Elon Musk is reportedly considering cutting around 10% of salaried staff from the electric automotive company, according to a report published by Reuters.

In emails sent to employees on Friday, Musk reportedly said that Tesla had become “overstaffed in many areas.” A separate message sent to executive on Thursday told recipients to “pause all hiring worldwide” due to a “super bad feeling” that Musk had about the economy.

These fatalistic messages come after days of increasing tension at the company after the world’s richest man told his staff that they had to return full-time to the workplace or leave. Shares in Tesla dropped by 9% on Friday after the Reuters report was published.

In late 2021 there were close to 100,000 people employed at Tesla and its subsidiaries according to the company’s SEC filing. It is not clear what proportion of them are salaried workers.

Biden hits out at Musk for “super bad” claims

On Friday President Joe Biden gave a speech in Delaware to celebrate the progress outlined in the latest jobs report. The Labor Department found that another 390,000 jobs were added to the United States economy in May, exceeding prior expectations.

After the speech Biden was asked a series of questions, including one about Musk’s “super bad feeling” regarding the economy. Musk has often criticised the Biden administration and the President took a swipe at the Tesla CEO.

“Lots of luck on his trip to the moon,” Biden said.

He compared the claims made by Musk to the actions of other automotive and technology companies, such as the expansions announced by Ford and Intel. While Tesla appears set to let go a significant proportion of staff, Ford just confirmed that 6,200 new jobs are being added in the Midwest.

Musk, never one to shy away from a Twitter spat, responded to a video posted online of Biden’s remarks with the message “Thanks Mr President!”

As part of the reply, Musk included a link to an article on the NASA website saying that SpaceX had been selected to “continue development of the first commercial human lander that will safely carry the next two American astronauts to the lunar surface.”

SpaceX, another company controlled by Musk, is working with NASA on the Artemis program to launch a human exploration mission on the surface of the moon.

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