Tesla to cut 10% of salaried workforce, Musk tells employees

Tesla Chief Executive Elon Musk plans to cut 10% of the electric car maker’s salaried workforce, he told staff in an email on Friday. T...

Tesla Chief Executive Elon Musk plans to cut 10% of the electric car maker’s salaried workforce, he told staff in an email on Friday.

The job cuts won’t apply to employees who build cars or batteries or install solar panels, and the number of hourly workers will increase, Musk said in the email, a copy of which was reviewed by the New York Times. “Tesla will reduce the number of employees by 10% because we have become overstaffed in many areas,” he said.

Reuters reported the news earlier, citing another email Mr. Musk sent only to Tesla executives. The automaker’s stock price closed about 9% lower on Friday after the article was published.

Tesla’s workforce has grown significantly as sales have grown, and it has built new factories, including two that opened this year near Berlin and Austin, Texas. The company employed more than 99,000 people at the end of last year. Just two years earlier, Tesla had 48,000.

Mr. Musk and Tesla did not respond to requests for comment.

Earlier this week, Mr Musk told employees of Tesla and SpaceX, his rocket company, that they had to spend at least 40 hours a week in their offices.

“The more senior you are, the more visible your presence should be,” Musk said in an email to SpaceX employees on Tuesday. “That’s why I spent so much time at the factory, so people online could see me working alongside them. If I hadn’t done that, SpaceX would have gone bankrupt a long time ago.

The announcement plunged Mr. Musk and his companies into a heated debate over the right approach to restoring normality after two chaotic years of the pandemic. It has also raised concerns that it could drive out top employees who would prefer to continue working remotely some or all of the time.

The new layoffs will not be the first at Tesla. The automaker also laid off some workers from 2017 and 2018.

In recent weeks, investors have started to question the company’s exorbitant share price. The market values ​​the company at more than $728 billion, more than several other major automakers combined. Tesla shares are down about 40% from their peak at the end of last year, drawing attention to the risks the company faces from growing competition, accusations racial discrimination and production problems at its Shanghai factory.

Some critics view Mr. Musk’s bid to buy Twitter as another distraction that could harm Tesla. A big concern for some investors is that the automaker’s board lacks sufficient independence from the chief executive to serve as a check on him and his impulses.

“From a good corporate governance perspective, Tesla has a lot of red flags,” said Andrew Poreda, senior analyst specializing in socially responsible investing at Sage Advisory Services, an investment firm in Austin. told The Times last month. “There are almost no checks and balances.”

Mr Musk’s management style and success – he is ranked as the world’s richest man by Bloomberg and Forbes – has won him admirers but made him a lightning rod. Tesla has lost a number of senior executives in recent years, many of whom have held senior positions at other automakers, technology companies and battery makers.

Recently, Mr. Musk praised the work ethic in China, where working conditions can be harsh and even abusive, suggesting that workers in the United States were lazy. “They won’t just burn midnight oil. They’ll burn the 3 a.m. oil,” he said of Chinese workers in an interview with the Financial Times. “So they won’t even leave the factory. Whereas in America people try to avoid going to work at all.

Still, some analysts remain optimistic about Tesla’s prospects. “In our view, Tesla probably doesn’t need to hire more employees to sustain growth, and we think the downsizing plan likely shows that Tesla overhired last year,” Seth Goldstein said. , senior equity analyst at Morningstar. said in a note Friday.

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Newsrust - US Top News: Tesla to cut 10% of salaried workforce, Musk tells employees
Tesla to cut 10% of salaried workforce, Musk tells employees
Newsrust - US Top News
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