Tesla is planning layoffs and a hiring freeze in response to the economic downturn
Following the layoff of thousands of employees at Twitter, Elon Musk’s Tesla has announced a hiring freeze. The company also confirmed that another round of layoffs will take place in the coming quarter. This comes months after Elon Musk directed Tesla executives to “pause all hiring” and cut 10% of their workforce in June.
The CEO gave different reasons for the layoffs to different people at the time, including that he has a “very bad feeling” about the economy. Tesla has informed some employees that it will no longer be hiring for the time being. In addition to the hiring freeze, Tesla stated that teams will be expected to lay off employees during the first quarter of 2023. The extent of the hiring freeze is unknown, as Tesla plans to expand in some manufacturing locations. At this time, no additional information is available. This comes at a time when Tesla’s stock is in free fall.
Musk has sold about $40 billion in Tesla stock in the last year, primarily to fund his $44 billion Twitter acquisition and to run the company after the deal is completed. Musk, on the other hand, has now promised that he will not sell any more Tesla stock for the next two years. Musk predicted in a Twitter Spaces audio chat that the economy will be in a “serious recession” in 2023, with lower demand for big-ticket items. “I won’t sell the stock until I’m sure, probably in two years. Under any circumstances, not next year, and most likely not the year after that “Musk stated. The stock has also suffered as demand for electric vehicles has dwindled. Tesla’s stock is on track for its worst month ever, as a sell-off intensified.
The stock fell nearly 10% to its lowest level since September 2020 on Thursday after the automaker’s website revealed it was offering $7,500 discounts on Model 3 and Model Y electric vehicles delivered in the United States this month. Tesla CEO Elon Musk announced that he will not sell any more Tesla stock for the next two years. Musk predicted in a Twitter Spaces audio chat that the economy will be in a “serious recession” in 2023, with lower demand for big-ticket items. His remarks came as Tesla stock fell further on Thursday amid concerns about slowing demand for electric vehicles and Musk’s distraction with Twitter and stock sales.