Topline
Elon Musk’s electric automaker Tesla is reportedly planning to implement a hiring freeze and conduct a round of layoffs in the next fiscal quarter, sources told Electrek Wednesday morning, as the company’s stock tumbles while Musk comes under fire for his handling of Twitter.
Tesla reportedly plans to conduct a round of layoffs and a hiring freeze in the next fiscal quarter.
Key Facts
Company officials reportedly informed employees about the hiring freeze and layoffs set to start in the fiscal quarter starting next month, according to a source familiar with the move.
The wave of layoffs would be the second in recent months for the Austin, Texas-based automaker, after Musk reportedly said he wanted to cut 10% of its workforce (estimated to affect roughly 10,000 employees) in June, writing in an internal memo he had a “super bad feeling” about the economy—though Musk later clarified the company would lay off 10% of its salaried workforce, hire more hourly workers and cut 3.5% of its overall staff.
It comes amid a wave of mass layoffs among U.S. banks, manufacturers and tech companies, including Twitter, which planned to cut 50% of its workforce last month (roughly 3,700 employees), after initial reporting indicating Musk was planning cuts as big as 75% of its staff, which Musk later denied (Forbes has been tracking the biggest layoffs this year).
Musk had lost his title as the world’s richest person earlier this month amid slumping Tesla stocks and as advertisers left Twitter following concerns over Musk’s decision to loosen its moderation policies and his reinstatement of high-profile banned accounts.
Last week, Tesla stocks dropped to a two-year low, falling to $150.04—its lowest point since November 2020—and they’ve continued to fall, hitting $137.80 at market close on Tuesday.
News Peg
Musk announced in a tweet on Wednesday he is “actively looking” for a successor as Twitter CEO, following up with a late-night tweet saying he would step down as soon as he finds “someone foolish enough to take the job.” Musk has come under fire since he completed his $44 billion purchase of the platform in October. Over the past week, he has been called out for suspending multiple journalists as well as an account linking to rival social media platform Mastodon—Musk claims those accounts linked to another account that posted information on the location of his private jet. He restored some journalists accounts on Saturday, although others appealed the suspension after they were asked to delete a tweet referencing the account that posted information on Musk’s jet.
Key Background
After Tesla’s first round of layoffs in June, two former employees sued the company, claiming it violated federal laws by failing to provide advance notice on mass layoffs to employees who would be affected by the cuts. More than 500 employees were let go in that round of cuts, according to the suit. Tesla stocks also took a nosedive after Musk—who also owns SpaceX—announced he took a 9% stake in Twitter in April, with shares falling 64% since then and 39% since he officially took over on October 27.
Surprising Fact
Tesla is the 490th best performing stock on the S&P 500’s year-to-date returns, dropping 57.45% since the beginning of the year.
Further Reading
Tesla (TSLA) to implement hiring freeze and new round of layoffs (Electrek)
2022 Major Layoffs Grow: Startup TuSimple Reportedly Cutting Hundreds Of Jobs (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2022/12/21/tesla-reportedly-plans-layoffs-and-hiring-freeze-amid-stock-turmoil-and-musks-twitter-meltdown/