Tesla stock price drops as Elon Musk wants to cut 10% of his staff
- Tesla shares fell 9% on Friday following a Reuters report that CEO Elon Musk wants to cut 10% of staff.
- Reuters reviewed an email Musk sent to Tesla executives saying he had a “bad feeling” about the economy.
- Musk has previously said the United States is heading into a recession.
Tesla shares fell on Friday after CEO Elon Musk told employees at the electric vehicle maker he was pessimistic about the state of the economy and was considering cutting jobs.
Musk said he had a “super bad feeling” about the economy and needed to cut about 10% of jobs at Tesla, Reuters reported, citing an email to executives he had seen. Musk clarified that the cuts would only apply to salaried employees, according to Electrek, and that the layoffs would not apply to workers who build cars, batteries or install solar components.
The stock fell 9.2% to end at $703.55, the lowest close since May 25. The stock price has fallen 33% this year as part of a broader sell-off in the technology sector that pushed the Nasdaq Composite into a
Reuters reported that the brief email titled “suspend all hiring globally” was sent on Thursday, arriving two days after Musk told Tesla staff to return to the workplace or quit their jobs.
Musk did not elaborate on the reasons for his “super bad feeling” in the email, Reuters reported.
About 100,000 people worked for Tesla and its subsidiaries, according to the company’s 2021 annual report filed with the Securities and Exchange Commission.
Musk, who tops Forbes’ list of the world’s richest people, said at the All-In Tech Conference in May that he thinks the United States is in a tough spot.
it would get worse.
He said the recession could last anywhere from a year to 18 months.
“Recessions aren’t necessarily a bad thing,” he said via video at the conference. “I’ve been through a few. And what tends to happen is if you have a boom that lasts too long, you get a bad allocation of capital. It starts raining money on the fools, basically.”
Tesla shares have also been under pressure this year following Musk’s $44 billion bid to buy Twitter. The social media company said on Friday that a mandatory 30-day waiting period for the deal had expired. This brings Musk closer to closing the deal, which is still subject to Twitter shareholder approval and other regulations.
Also on Friday, Coinbase shares fell 9.7% after the crypto exchange announced on Thursday that it would cancel a number of previously accepted job offers and extend a pause in hiring, citing ” current market conditions”. The cryptocurrency market has crashed this year and has lost about half of its value since peaking at $3 trillion in November.