Tesla shares down 5% after Musk reportedly announces staff cuts

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Tesla shares fell nearly 5% in premarket trading on Friday after Chief Executive Elon Musk reportedly said the electric vehicle maker would cut 10% of its workforce and freeze hiring.

Musk said the decision was due to “super bad feeling” about the economy, according to details of an email titled “suspend all hiring globally” to executives reported by Reuters.

The email, which was sent on Thursday, followed a request from Musk that Tesla employees be in the office at least 40 hours a week or find other employment. He told staff that “remote work is no longer acceptable” and production “won’t be done over the phone.”

Tesla had more than 4,150 job postings on its website in the United States. The company employed 99,290 people worldwide at the end of 2021, it said in its latest annual report to the Securities and Exchange Commission.

Musk is the latest high-profile business leader to offer a gloomy economic outlook as inflation soars, the Federal Reserve’s monetary policy tightening and war in Ukraine disrupt markets.

JPMorgan Chase Chief Executive Jamie Dimon warned Wednesday of an impending economic “hurricane.” “This hurricane is right out there on the road coming our way,” he said. “We just don’t know if it’s Minor or Superstorm Sandy . . . And you better be prepared. Executives from Bank of America and Goldman Sachs have expressed similar views.

Last month, Musk said the United States was “probably” already in a recession and it “will get worse.” “It will probably be difficult for, I don’t know, a year, maybe 12 to 18 months,” he added.

Tesla and other automakers have raised doubts about their ability to meet electric vehicle production targets, as supply chain disruptions and rising raw material costs could hamper the rollout of electric vehicles despite a high and growing demand for cars.

“There are commodity constraints that we see coming, in lithium production, probably in about three years, and in cathode production,” Musk told a Financial Times conference.

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