Tesla to Lay off Thousands Amid Economic Downturn, Hiring Freeze

After shedding thousands of jobs and layoffs at Twitter, Elon Musk’s Tesla has now told its employees that it is implementing layoffs. The company also confirmed that another wave of layoffs is coming next quarter.

Hiring Freeze

According to an source report, this comes months after Elon Musk asked Tesla executives to “stop all hiring” and cut 10 percent of the workforce in June.
At the time, the CEO gave different reasons for firing different people, including that he had a “very bad feeling” about the economy.
Tesla notified some employees that it would stop hiring for the time being. In addition to the hiring freeze, Tesla stated that teams would be laid off in the first quarter of 2023, according to the report.

It is unclear how extensive the hiring freeze will be as Tesla continues to expand into some manufacturing locations. No further details have been given at this stage. This happened at a time when Tesla’s stock was in free fall.

Wave of Mass Layoffs

The wave of layoffs would be the second in recent months for the Austin, Texas-based automaker after Musk announced in June that he wanted to cut 10 percent of his workforce (about 10,000 workers). He had a “very bad feeling” about the economy, although Musk later clarified that the company would lay off 10 percent of its salaried workforce, hire more hourly workers, and cut 3.5 percent of its total workforce.

Over the past year, Musk has sold about 40 billion worth of Tesla shares, mostly to finance billion purchase of Twitter and manage the company after the deal. However, Musk has now promised not to sell Tesla shares for another two years. 

Tesla Share Price

Speaking in an audio chat on in Twitter Spaces, Musk said he predicts the economy will hit a “severe recession” in 2023, with lower demand for major goods. “I’m not going to sell the stock until I know, probably in two years.” “Certainly not next year, and probably not the year after that,” Musk said.

The share price was also affected by the weakening of demand for electric cars. Tesla shares are having their worst month ever as the sell-off deepened on Thursday.
The stock fell nearly 10 percent on Thursday to its lowest level since September 2020 after the automaker’s website showed it was offering a $7,500 discount on Tesla Model 3 and Model Y electric vehicles that will be delivered in the United States this month.

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