Monday, July 4, 2022
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Musk details Tesla job cuts as recession fears grow


DOHA — Tesla Inc. CEO Elon Musk said a 10 percent cut in salaried staff at the electric vehicle producer will happen over three months, as the world’s richest man predicted a U.S. recession was more likely than not.

His remarks were his most detailed explanation of job cut plans and his first in-person appearance since Reuters reported at the start of this month that the company needed to cut staff by about 10% and was pausing hiring worldwide.

Speaking at the Qatar Economic Forum organized by Bloomberg, Musk said the cuts would apply only to salaried workers, meaning a 3.5 percent reduction in total headcount, changes he described as “not super material.”

But he expressed concern about the prospect of a U.S. recession.

“It’s not a certainty, but it appears more likely than not,” he said.

Musk’s outlook echoes comments from executives, including JPMorgan Chase & Co CEO 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 U.S. will go into recession has been a growing concern for CEOs, the Federal Reserve and the Biden administration.

U.S. President Joe Biden reiterated on Monday that he felt a U.S. recession was not inevitable, even as the world’s largest economy struggles to tackle soaring gasoline prices and inflation, which is at its highest in 40 years.

Former U.S. Treasury Secretary Lawrence Summers told NBC News on Sunday he expected a recession.

In an email on June 2, seen by Reuters, Musk told Tesla executives he had a “super bad feeling” about the economy and that the company needed to cut staff by about 10 percent and “pause all hiring worldwide.”

He said on Tuesday Tesla expected to increase the number of workers paid by the hour as opposed to on fixed salaries.

He also said he was sticking with digital currency and intended to personally support dogecoin.

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



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