Anticipating U.S. downturn, Elon Musk details Tesla staff cuts

by mcdix

Tesla CEO Elon Musk said a 10% cut in pay at the electric car maker would come in three months as the world’s richest man predicted a US recession was more likely than not. Musk said the cuts would only apply to salaried workers, meaning a 3.5% reduction in the total workforce, changes he described as “not super material.” (Sign up for our Technology Newsletter, Today’s Cache, for insights on emerging topics at the intersection of technology, business, and policy. Click here to subscribe for free.)

His comments were his most detailed explanation of the job cuts plans, and his first personal appearance since Reuters reported early this month that the company would have had to cut its workforce by about 10% and halt hiring worldwide. Speaking at the Qatar Economic Forum hosted by Bloomberg, Musk said the cuts would only apply to salaried workers, meaning a 3.5% reduction in the total workforce, changes he described as “not super material.” But he expressed concern about the prospect of a recession in the US. “It’s not a certainty, but it seems more likely than not,” he said.


Musk’s outlook reflects comments from executives, including Jamie Dimon, CEO of JPMorgan Chase & Co, and John Waldron, president of Goldman Sachs. A “hurricane is right there on the road heading our way,” Dimon said early this month. Whether the United States will slip into recession has been a growing concern for chief executives, the Federal Reserve, and the Biden administration. US President Joe Biden reiterated Monday that he believed a recession in the US was not inevitable, even as the world’s largest economy struggles to deal with rising gasoline prices and inflation, which are at their highest 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 its workforce by about 10% and “stop all hiring worldwide.”. He said Tuesday that Tesla expected to increase the number of hourly employees rather than fixed salaries. He also said he was sticking to digital currencies and intended to back Dogecoin personally. Digital currencies have been extremely volatile this year. Still, bitcoin rose following Tesla’s announcement in February last year that it had bought $1.5 billion of the money and accepted it as payment for vehicles for a short time.

‘Very important issue’ unresolved on a Twitter deal

Elon Musk also spoke about his offer to buy Twitter, which Forbes magazine reported early this month, agreed to purchase 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 waiting for a resolution on that matter, which is very important,” he said, reiterating his doubts about Twitter’s claims that fake or spam accounts represent less than 5% of the daily active users that generate revenue. It can be generated.

“And then, of course, there’s the question of whether the debt portion of the round will come together. And will shareholders vote in favor?” Musk said he wants to get 80% of North America and half of the world on Twitter. “My ambition for Twitter is to be as inclusive as possible,” he said. He said the most important thing was to steer the company in the right direction, as with his private rocket company SpaceX and Tesla. “Whether I’m CEO is much less important than my ability to steer the product in the right direction,” he said.

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