Musk’s comments, which match other CEOs, are followed by a plan to lay off 10% of Tesla’s salaried staff
Elon Musk has cautioned that a US recession is “more likely than not” to come soon as the Tesla chief executive confirmed plans to reduce salaried staff at the electric carmaker by 10% over the next three months.
The world’s richest man said a recession in the US was imminent but would most likely come in the short term. Musk said in an interview via videolink at the Qatar Economic Forum in Doha on Tuesday:
“A recession is inevitable at some point. As to whether there is a recession in the near term, that is more likely than not.”
Musk said Tesla was preparing to cut 10% of the salaried staff, verifying plans disclosed in an internal email this month by Reuters. Musk said at the event organized by Bloomberg:
“Tesla is reducing its salaried workforce by roughly 10% over the next probably three months or so. We expect to grow our hourly workforce. But we grew very fast on the salaried side, and we grew a little too fast in some areas.”
Tesla hires just over 100,000 people but Musk said the cuts would be equal to a reduction of close to 3.5% because salaried workers constitute about one-third of the workforce, while Tesla is expanding the amount of staff it hires on an hourly basis, who comprise around two-thirds of the workforce.
Musk’s outlook matches remarks from other executives, including JPMorgan boss Jamie Dimon, who cautioned in June that a “hurricane is right out there down the road coming our way”. The US president, Joe Biden, repeated on Monday that he believed a US recession was not unavoidable, even as the world’s biggest economy grapples to curb high petrol prices and inflation, which is at its highest in four decades.
Former US treasury secretary Lawrence Summers told NBC News on Sunday that he too awaited a recession. Musk also talked about his $44bn (£36bn) bid to take over Twitter, which got a formal endorsement from the social media firm’s board on June 21.
Musk said there were unsettled issues, including the number of spam users and the debt portion of the deal. Lawyers representing Musk have cautioned he could abandon the deal due to a disagreement over how Twitter calculates the number of spam or fake accounts on its platform.
“We’re still awaiting resolution on that matter, and that is a very significant matter,” he said, restating doubts over Twitter’s claims that spam or fake accounts amounted to less than 5% of its 229m daily active users.
The Tesla boss also raised doubts about the debt financing for the deal, which is being obtained from a syndicate of banks that have pledged $13bn.
“And then, of course, there’s the question of, will the debt portion of the round come together? And then will the shareholder’s vote in favor?”
Musk said he would like to get eighty percent of North America and half the world on Twitter. “My aspiration for Twitter is to be as inclusive as possible,” he said.
