Anticipating US recession, Elon Musk details Tesla employee cuts

Anticipating US recession, Elon Musk details Tesla employee cuts

DOHA, June 21 (Reuters) – Elon Musk, CEO of Tesla (TSLA.O), said a 10% cut in salaried personnel at the electric car maker will come in three months as the world’s richest man predicted that a US recession would be more likely than not.

His remarks were his most detailed explanation of the job-cutting plans and his first personal appearance since Reuters reported earlier this month that the company needed to cut staff by about 10% and was halting hiring worldwide.

Speaking at the Qatar Economic Forum, organized by Bloomberg, Musk said the cuts would only apply to salaried workers, which would mean a 3.5% reduction in total headcount, changes he described as “non-supermaterial”.

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But he expressed concern about the prospect of a US recession.

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

Musk’s perspective echoes comments from executives including JPMorgan Chase & Co CEO Jamie Dimon and Goldman Sachs chairman John Waldron. A “hurricane is just over the road heading our way,” Dimon said earlier this month.

Whether the United States will enter recession has been a growing concern for top executives, 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 struggled to fight rising gas prices and inflation, which is at its lowest level. high in 40 years.

Former US Treasury Secretary Lawrence Summers told NBC News on Sunday that he expected a recession.

In a June 2 email 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% and “pause all hiring in Worldwide”.

He said Tuesday that Tesla hopes to increase the number of workers paid hourly rather than fixed wages.

Elon Musk arrives at the In America: An Anthology of Fashion themed Met Gala at the Metropolitan Museum of Art in New York City, New York, USA on May 2, 2022. REUTERS/Andrew Kelly

He also said that he was joining the digital currency and intended to personally support dogecoin.

The digital currency has been extremely volatile this year, but bitcoin surged after Tesla announced in February last year that it had purchased $1.5 billion of the currency and briefly accepted it as payment for vehicles.

‘VERY SIGNIFICANT MATTER’ UNRESOLVED ON TWITTER

Elon Musk also spoke about his bid to buy Twitter (TWTR.N), which Forbes magazine reported earlier this month that he has agreed to buy for $44 billion.

Musk said there were unresolved issues, including the debt portion of the deal and the number of spam users.

“We are still awaiting resolution on this matter, and this is a very significant matter,” he said, reiterating doubts about Twitter’s claims that fake or spam accounts accounted for less than 5% of its monetizable daily active users.

“And then, of course, there’s the question of, does the debt portion of the round come together? And then will the shareholders vote in favor?”

Musk said he would like to have 80% of North America and half of the world on Twitter.

“My aspiration for Twitter is to be as inclusive as possible,” he said.

Most important was to steer the company in the right direction, as with its private rocket company SpaceX and Tesla, he said.

“Whether I am CEO is much less important than my ability to steer the product in the right direction,” he said.

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Additional reporting by Nadine Awadalla in Dubai and Hyunjoo Jin in San Francisco; Written by Saeed Azhar; edited by Jason Neely and Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.

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