Backtracking from an email just two days ago saying that job cuts of 10 per cent were needed, Tesla Inc Chief Executive Elon Musk has said that the electric vehicle maker’s total headcount will increase over the next 12 months.
Making the announcement on Twitter, Musk said “Total headcount will increase, but salaried should be fairly flat.”
Highlighting that he has a “super bad feeling” about the US economy, Musk had previously told Tesla executives in an email, which was seen by Reuters, that he needed to cut jobs by about 10 per cent.
Total headcount will increase, but salaried should be fairly flat
— Elon Musk (@elonmusk) June 4, 2022
According to that email, Musk believed that Tesla had become “overstaffed in many areas” as the Federal Reserve moves aggressively to tighten monetary policy in response to inflation.
Tesla, which had 100,000 employees at the end of 2021, has issued an ultimatum to its employees asking them to return to the office for a minimum of 40 hours a week.
The timing of the email was questioned by several analysts as Tesla is ramping up new factories in Austin, Texas and Germany.
Calling Musk’s email “somewhat odd”, CFRA Research analyst Garrett Nelson said the billionaire, who is the world’s richest man, ”wants to get ahead of the curve in terms of a slowdown across the highly cyclical auto industry.”
Since China is Tesla’s biggest market, Nelson added that most of the job cuts could come in Shanghai as production in the city has been weighed down by the Communist Party’s zero-tolerance Covid-19 policy.
According to Wards Intelligence, in the United States new-car sales in May finished at a weak annualised rate of 12.68 million after supply chains were exacerbated by Russia’s invasion of Ukraine.
(With inputs from agencies)
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