Tesla to Cut 10% of Salaried Staff, Musk Tells Employees

Tesla CEO Elon Musk plans to cut 10 percent of electric car maker office workers, he told staff in an email Friday.

Musk said in an email that the reduction would not apply to employees who manufacture cars and batteries or install solar panels, but would increase the number of employees per hour. “Tesla plans to cut salary staff by 10% due to overstaffing in many areas,” he said.

Reuters previously reported the news, citing another email that Mr. Musk sent only to Tesla executives. After the article was published, automakers’ stock prices closed by about 9 percent on Friday.

Tesla’s staff has grown significantly as sales surged and they built new factories this year, including two factories opened near Berlin and Austin, Texas. The company hired more than 99,000 workers at the end of last year. Just two years ago, Tesla had 48,000.

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

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

“The older you are, the more prominent your presence will be,” Musk told SpaceX employees on Tuesday by email. “That’s why I spent so much time in the factory — so that people on the line can see me working with them. If I didn’t do that, SpaceX Would have gone bankrupt long ago. “

The announcement drove Musk and his company into a fiercely contested debate over the right approach to restoring normality after a two-year chaos of the pandemic. It also raised concerns that he might someday or always drive away top performers who prefer to work remotely.

The new layoff is not the first layoff at Tesla. Automakers also fired some workers in 2017 and 2018.

In recent weeks, investors have begun to question the company’s high stock prices. The market rates the company at over $ 728 billion, more than the combined number of several other major automakers. Tesla’s stock has fallen about 40% from its highs at the end of last year, focusing on the risks Tesla faces due to intensifying competition, racist accusations and production problems at its Shanghai plant.

Some critics see Musk’s bid to buy Twitter as yet another distraction that could hurt Tesla. One of the major concerns for some investors is that the automaker’s board lacks sufficient independence from the CEO and plays a role in checking him and his urges.

“There are many danger signs in Tesla from a corporate good governance perspective,” said Andrew Poleda, a senior analyst specializing in socially responsible investment at Austin’s investment firm Sage Advisory Services. rice field. “There is almost no check and balance.”

Mr. Musk’s management style and success-he is listed by Bloomberg and Forbes as the wealthiest man in the world-praised him, but made him a lightning rod. Tesla has lost many top executives in recent years, many of whom hold top positions in other automakers, tech companies and battery makers.

Recently, Mr. Musk praised China’s work ethic, where working conditions can be harsh or even abusive, suggesting that US workers were lazy. “They aren’t just burning oil at midnight. They’re burning oil at 3am.” He talked about Chinese workers in an interview with the Financial Times.. “So they don’t even leave the factory-type ones. On the other hand, in America, people are trying to avoid going to work altogether.”

Still, some analysts remain bullish on Tesla’s outlook. “In our view, Tesla will not need to hire any more employees to sustain growth. Plans to reduce the workforce show that Tesla was overhired last year. “Morning Star Senior Equity Analyst Seth Goldstein said Said in a memo On Friday.