Elon Musk Says Tesla Job Cuts Will Shrink Workforce by 3.5%

(Bloomberg) – Tesla Inc. will reduce its salaried workforce by about 10% over the next three months, resulting in an overall reduction of about 3.5% in the total workforce, as the number of hourly employees is expected to increase further, chief executive Elon Musk said. said.

Bloomberg’s Most Read

“We grew very quickly on the employee side,” Musk said in an interview with Bloomberg News editor John Micklethwait at the Qatar Economic Forum on Tuesday. “Within a year, I think our workforce will be higher” in terms of employees and hours, but for now the reduction will be 3% to 3.5%, he said.

Tesla and Twitter share a hike after Musk speaks at the Economic Forum

Musk announced the company’s plans to cut staff earlier this month. Tesla, now headquartered in Austin, Texas, has about 100,000 employees worldwide, hiring rapidly as new factories are built in Austin and Berlin. The cuts, which affected human resources representatives and software engineers, came as a surprise to many, with several employees being told they were being laid off immediately. Two workers at Tesla’s battery plant near Reno, Nevada, claim the company failed to meet the 60-day notification requirement under the Worker Adjustment and Retraining Act , according to a lawsuit they filed Sunday night in federal court in Austin.

“Let’s not read too much into a pretrial trial that has no value,” Musk said in Tuesday’s interview via video link.

Musk, 50, got into the work-from-home debate earlier this month, giving Tesla staff an ultimatum to return to the office or leave.

“Everyone at Tesla is required to spend at least 40 hours in the office per week,” Musk wrote in an email titled “To be very clear.” “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.

“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.

The mandate has also spooked workers at Twitter Inc., who have had a work-from-anywhere policy throughout the Covid pandemic. Before closing his deal to buy the social media platform, Musk floated the idea of ​​turning his San Francisco headquarters into a homeless shelter because “nobody shows up anyway.”

In contrast, he praised the workers at his Shanghai factory. Many lived and worked on site to maintain production for most of the Chinese city’s two-month Covid lockdown earlier this year.

“I’m very impressed with automakers in China, only general contractors in China,” Musk said Tuesday. “I think they are extremely competitive, hardworking and smart.”

As for competition from major global automakers, Musk said Tesla isn’t really thinking about possible rivals. The main issues the company faces relate to supply chains and its own production capacity.

“The demand for our cars is extremely high and the waiting list is long,” he said. “We really don’t think about the competition – we just think about how we address the limiting factors in the supply chain and our own industrial capacity.”

“Basically, we need to build factories faster,” he said. “And then we have to anticipate whatever the choke points are across the entire lithium-ion battery supply chain, from mining and refining to cathode and anode production and cell formation.”

For more from Musk at the Qatar Economic Forum, click here for our TOPLive blog.

The Qatar Ministry of Trade and Industry, Qatar Investment Authority and Qatar Investment Promotion Agency are underwriters to the Qatar Economic Forum, powered by Bloomberg. Media City Qatar is the host organization.

Bloomberg Businessweek’s Most Read

©2022 Bloomberg LP

Michael A. Bynum