Elon Musk plans 10% staff cut at Tesla, freezes hiring

San Francisco, June 4

Elon Musk is reportedly planning to axe 10 per cent of Tesla staff, along with freezing hiring amid stalled Twitter deal, global macroeconomic conditions like chip shortage, rising inflation and high interest rates.

A Reuters report said on Friday that Musk has emailed Tesla executives, telling them the electric car-maker needs to pause hiring worldwide and cut its workforce by about 10 per cent.

Tesla has nearly 1 lakh employees worldwide and Musk cites his "super bad feeling" about the economy for reducing the workforce.

Tesla cut hundreds of workers in October 2017, about 9 per cent of staff in June 2018, and about 7 per cent in January 2019.

It also cut salaries and furloughed employees in April 2020.

Tesla has faced shutdowns at its China gigafactory due to Covid-19 lockdowns.

Musk is also facing a "crypto winter" and his favourite cryptocurrency Dogecoin has seen its value dip by nearly 60 per cent over the last six months.

Earlier this week, Musk gave an ultimatum to Tesla employees to either return to office or get out, saying they "should pretend to work somewhere else" if they disagree with the company's policy.

He sent a series of emails that asked employees to come back to the office or be terminated.

"Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla. This is less than we ask of factory workers," Musk wrote, reports Electrek.

"Everyone at Tesla is required to spend a minimum of 40 hours in the office per week. Moreover, the office must be where your actual colleagues are located, not some remote pseudo office. If you don't show up, we will assume you have resigned," he added, taking a hard stance on returning to office.

Despite supply chain challenges and factory shutdown in China, Tesla earned $3.3 billion profit in the first quarter this year, registering $18.7 billion in revenue.

In the first quarter, Tesla produced more than 305,000 vehicles and delivered more than 310,000 vehicles.