Elon Musk cuts Tesla workforce and orders workers back to office

Elon Musk has had HR week from hell.

First, the world’s richest man issued an ultimatum to employees of Austin-based automaker Tesla: Work in the office or find a job elsewhere. Two days later, another bombshell hit: Citing fears about the economy, Musk said Tesla was cutting 10% of its salaried workforce and freezing hiring.

Both moves generated tons of buzz on social media and sparked an outpouring of criticism.

Reuters news service reported on June 3 that in an email, Tesla boss Musk told workers he had a “super bad feeling” about the economy and that the company had to reduce its salaried workforce by 10%.

While the ranks of salaried employees at Tesla have become “overstaffed in many areas,” Musk wrote, the number of hourly workers will actually grow.

At the end of 2021, Tesla employed approximately 100,000 people worldwide. It’s unclear how many of those employees work in Austin and how the edict will affect hiring at Tesla’s local headquarters or at its new factory here.

News of the downsizing came two days after Musk sent an unrestricted company-wide email ordering Tesla employees to return to the office, rather than work remotely.

“Everyone at Tesla is required to spend at least 40 hours in the office per week,” Musk wrote in the internal email. “Also, the office should be where your real colleagues are, not some remote pseudo-office. If you do not show up, we will assume that you have resigned.

In a previous email, Musk noted that the office where a Tesla employee works should make sense. For example, a Tesla human resources employee at the company’s manufacturing facility in Fremont, California should not be located in another state.

“The more senior you are, the more your presence should be visible,” Musk wrote. “That’s why I lived so long at the factory – so those on the line could see me working alongside them. If I hadn’t done that, Tesla would have gone bankrupt a long time ago.

Since June 3, Forbes estimated Musk’s net worth at $219.7 billion. He derives his wealth from companies such as Tesla, SpaceX and The Boring Co. The billionaire is trying to buy social media platform Twitter for $44 billion.

Michael A. Bynum