Tesla plans to cut staff and freeze hiring next quarter, report
The company has begun telling staff about the planned layoffs
Elon Musk's electric automaker Tesla has reportedly informed staff that there will be another round of layoffs early next year, along with a total hiring freeze.
According to Electrek, the new round of layoffs will take place in the next quarter, meaning the January to March period.
The reported move comes at the time when Tesla investors have expressed worries that CEO Elon Musk is distracted with running Twitter, the social media firm he purchased in October for $44 billion.
Additionally, Tesla analysts have reduced their pricing forecasts for the firm because of fear that weak Chinese demand may impede the EV manufacturer's deliveries in 2023.
Sources told Electrek that Tesla has already begun telling staff about the planned layoffs. One source claimed that Elon Musk has offered various individuals different explanations for his decision, although his fear of an economic recession is the most common reason given.
It is still unclear if the business would fire a large number of employees all at once or will instead follow in Amazon's footsteps with staged job cuts.
Over the years, Tesla has seen rapid growth, which often causes recruiting inefficiencies that ultimately result in waves of layoffs like this one.
Musk said in June that the company will lay off around 10% of its salaried employees over the following three months. The company, however, swiftly overcame the hiring hiatus and resumed recruitment over the second half of the year.
Recently, Tesla has begun to provide temporary discounts and benefits on its vehicles, which has led to speculation that the company could be experiencing some rare demand issues.
Bloomberg reported last week that Elon Musk's bankers are contemplating offering the billionaire additional margin loans secured by Tesla shares to replace some of the high-interest debt he piled on Twitter.
According to a filing made with the US Securities and Exchange Commission last week, Musk sold Tesla shares worth $3.58 billion from December 12 through December 14.
Since April, Musk has reportedly sold roughly $23 billion worth of Tesla shares, with the majority of the money likely going toward funding his $44 billion purchase of Twitter. Earlier this month, he sold 9,34,091 shares of Tesla, worth $963.2 million.
The last few months have seen a number of tech firms laying off thousands of workers, and it seems that a significant number of employees will continue to be negatively impacted by job losses in the new year.
Last month, Facebook parent Meta made 11,000 people redundant, nearly 13% of its staff. Amazon is also reducing staff and has said that the cuts will continue to 2023. Waves of layoffs at Goldman Sachs and Cisco have also been announced in anticipation of changing macroeconomic conditions in early 2023.
Google is also reportedly planning to lay off 10,000 workers early next year. There have been reports circulating that the company has asked the managers to evaluate the performance of the staff, with the intention of firing those employees who have performed poorly and replacing them with newer, more qualified candidates. In this manner, the company could avoid making large-scale headline-grabbing cuts.