Tesla will reportedly implement a hiring freeze and fire employees in the next quarter, as it struggles to lift sales.
Elon Musk urged Tesla executives in June to “pause all hiring” and slash 10 percent of the workforce.
The billionaire has provided different reasons for the job cuts to different people citing that he has a “very bad feeling” about the economy.
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Tesla has grown rapidly in recent years, such rapid growth often leads to hiring inefficiencies that contribute to waves of layoffs, like this one.
This “hiring pause” is unsettling as Tesla has multiple initiatives currently in place and it needs to employ thousands at new plants in the US and Germany.
In June Tesla implemented a hiring freeze but that decision was almost immediately reversed and recruitment resumed again in this year’s second half.
The current scope of the hiring pause is unknown, as Tesla still has plans to grow several of its production sites.
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At this time, no more details are available.
The actions come as Tesla’s stock has been sliding throughout the year, despite its financials reaching new highs almost every quarter.
This is due in part to a larger market slump in 2022, but Tesla’s stock has been outperforming the market in recent months.
The timing of the latest decline corresponds to Musk’s acquisition of Twitter and his sale of Tesla stock to fund the social media site.
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Some signs have appeared recently showing that Tesla’s issues are not limited to the stock market.
The company has recently begun to provide temporary discounts and bonuses on its vehicles, raising the possibility that Tesla is experiencing some unusual demand challenges.
Tesla, however, is not the only company implementing job cuts.
Several other companies, including Goldman Sachs and Cisco, have also confirmed layoffs in anticipation of worsening economic situations in early 2023.
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