According to an email sent by Elon Musk to all Tesla executives, the company is preparing to lay off 10% of its payroll and to put all recruitment on hold.
All car manufacturers are suffering from the current crisis. COVID, the shortage of semiconductors and the war in Ukraine have indeed put a strain on the well-oiled, but strained, supply chain of the automotive industry. Especially since the demand for electric cars has surged in recent months, giving rise to an imbalance between supply and demand. Consequently, we are witnessing an extension of delivery times (sometimes more than a year between the order and the actual delivery) as well as price increases from all manufacturers, and in particular from Tesla.
The American manufacturer is currently facing a difficulty in supplying the computer necessary for the proper functioning of the charging port on the Model 3 and Model Y. What makes the situation even more complicated for Tesla when the manufacturer was just getting out of a delicate situation in its Shanghai factory, half closed due to COVID. We therefore imagine that the production rate will be slowed down for the weeks to come. What explain the decision taken by Elon Musk this morning and communicated to his executives via an e-mail entitled ” Stop recruiting worldwide“.
Elon Musk has big doubts about the future
The email seen by Reuters this morning is unequivocal. Elon Musk reportedly wrote having a “ very bad feeling on economics. This would then imply the elimination of 10% of the company’s positions as well as the freezing of recruitment throughout the world. This would represent a decrease of 10,000 employees, since as of December 31, 2021, Tesla employed nearly 100,000 full-time people.
This email follows two other emails sent by the billionaire to his employees in the middle of the week, asking them to stop teleworking or to resign if they refused. A request which went very badly in Germany since the new factory of the German manufacturer has 19 staff representatives, some of whom are members of the largest trade union in the automotive industry: IG Metall. He has just reacted publicly to the virtual ban on telework at Tesla, stating that by ” Germany, an employer cannot dictate the rules as he sees fit“. And to recall that a worker can count on the strength and power of his union if he or she does not want to accept the demands of his company“. The showdown has just begun!
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