Elon Musk is looking to cut 10% of Tesla jobs

In an email to Tesla executives obtained by Reuters, Elon Musk said that he had a “very awful feeling” about the economy and that the electric automaker has to reduce approximately 10% of employment.

The message, headed “stop all recruiting globally,” was delivered two days after the billionaire instructed employees to return to work or go.

It joins an increasing chorus of corporate executives warning about the perils of recession.

According to Tesla’s annual SEC filing, the corporation and its subsidiaries will employ about 100,000 workers by the end of 2021.

The corporation did not respond to a request for comment right away.

On Friday, Tesla shares tumbled over 3% in pre-market trading in the United States.

At the same time, its Frankfurt-listed stock plunged 3.6 percent after the Reuters article.

Nasdaq futures in the United States have gone negative and are now trading 0.6 percent down.

Musk has warned about the possibility of a recession in recent weeks. Still, his email ordering a hiring halt and staff reductions was the most direct and high-profile statement of its sort from an automaker’s CEO.

Demand for Tesla cars and other electric vehicles has been robust so far. As a result, many of the conventional markers of a slowdown, such as rising dealer inventories and incentives in the United States, have not materialized.

However, after COVID-19 lockdowns caused expensive plant downtime, Tesla has struggled to restore production at its Shanghai facility.

“Many people share Musk’s negative sentiment,” said Carsten Brzeski, global director of macroeconomic research at Dutch bank ING. “However, we are not discussing a worldwide economic downturn. We anticipate a worldwide economic slowdown by the end of the year. The United States will cool, but China and Europe will not recover.”

Musk’s pessimistic prognosis reflects previous remarks from Jamie Dimon, CEO of JPMorgan Chase & Co (JPM.N), and John Waldron, President of Goldman Sachs.

This week, Dimon said, a “storm is just out there down the road heading our way.”

Inflation in the United States is near 40-year highs, producing a rise in the cost of living for Americans.

At the same time, the Federal Reserve has the tough challenge of reducing demand enough to keep inflation in check without triggering a recession.

In the short email reviewed by Reuters, Musk, the world’s wealthiest man, did not expand on the reasons for his “very awful vibe” about the economic prospects.

Several analysts have lately lowered their price forecasts for Tesla, citing slower deliveries and decreased production at its Shanghai facility, which serves as a center for providing electric cars to China and for export.

According to business filings and statistics on sales in China, China accounted for slightly over a third of Tesla’s worldwide deliveries in 2021.