You are here

Tesla shares fall following report of possible layoffs

By AFP - Jun 04,2022 - Last updated at Jun 04,2022

In this file photo taken on May 14, Tesla cars sit at charging stations in Yermo, California (AFP photo)

NEW YORK — Tesla shares fell on Friday following a report that its chief executive Elon Musk wants to trim headcount due to the uncertain economic outlook.

Musk said in an email to executives that he has a "super bad feeling" about the economy, according to a report from Reuters, adding that the electric automaker should pause all hiring and cut about 10 per cent of jobs.

Tesla did not immediately respond to a query from AFP. 

The statement is the latest from a business leader warning about a slowdown as the Federal Reserve moves aggressively to tighten monetary policy in response to inflation, stoking recession fears.

Tesla had a little more than 100,000 employees at the end of 2021.

CFRA Research analyst Garrett Nelson called the timing of Musk's e-mail "somewhat odd" considering that Tesla is ramping up new factories in Austin, Texas and Germany.

"But we think Musk wants to get ahead of the curve in terms of a slowdown across the highly cyclical auto industry," said Nelson in a note, adding that most of the job cuts could come in Shanghai, where China's zero-tolerance COVID-19 policy has weighed on production.

Shares of Tesla fell 5.6 per cent to $730.49 in early trading on Friday.

up
43 users have voted.


Newsletter

Get top stories and blog posts emailed to you each day.

PDF