Tesla CEO Elon Musk said on Friday that he has a “super bad feeling” about the U.S. economy and that, as a result, he intends to slash roughly 10% of jobs at his electric vehicle manufacturing company. Musk made the announcement in an email sent to executives at the company, which was shared with Reuters.
Musk, whose company employs around 100,000 people, has spent weeks warning about the risk of a recession in the United States.
“Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas,” Musk wrote in the email. “Note this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.”
Despite strong sales for Tesla vehicles and other electric cars in the United States, the risk of a recession within the next year is high, and cutting jobs now could give the company a head start in managing expectations and reducing expenditure as consumers begin to spend less.
Biden Dismisses Concerns
U.S. President Joe Biden appeared to dismiss Musk’s concerns about the economy this week, citing hiring increases from other vehicle manufacturers.
“Well, let me tell you, while Elon Musk is talking about that, Ford is increasing their investment overwhelmingly,” the president said, reaching for notes from his inside pocket.
“I think Ford is increasing investment in building new electric vehicles, 6,000 new employees, union employees I might add, in the Midwest…the former Chrysler Corporation, Stellantis, they are also making similar investments in electric vehicles. Intel is adding 20,000 new jobs, making computers chips,” Biden continued.
And while the president’s claims are accurate – namely that American businesses are ramping up production and hiring after years of lockdowns and COVID restrictions – he failed to address the warning signs that the U.S. economy is headed towards a recession.
Chief among those warning signs is inflation, which climbed 8.5% in March and 8.3% in April.
President Biden also didn’t address the nature of some of the hiring increases from American companies – particularly Intel, which is taking proactive measures to ensure that industry has access to a sufficient number of semiconductors amid a worldwide shortage.
In a dismissive tone, the president expressed no concern at Musk’s decision and wished him luck on his “trip to the moon” – likely a reference to Artemis, a joint SpaceX and NASA project that will land the next Americans on the moon.
Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.
