Are gigantic job cuts coming soon at Tesla?

Something seems to be going wrong at Tesla. First, CEO Elon Musk threatened employees with dismissal who would like to work in a home office, and now the employees of the electric car manufacturer have to accept the next bad news. An internal email has been sent to managers, indicating that large-scale layoffs are planned. What is this all about?

Job cuts due to poor economic situation

The approximately 100,000 employees currently under contract at Tesla could soon become far fewer. The news agency Reuters wants to have learned from a reliable source that ten percent of the workforce is threatened with the sack. The source refers to an e-mail that Elon Musk himself claims to have sent to his managers. The reason for his planned job cuts and a temporary hiring freeze is the current poor state of the global economy. Since Tesla itself was able to post pleasing quarterly figures and emerged as one of the few winners from the Corona pandemic, this is very surprising. Obviously, Musk feels that this flight of fancy can’t go well for much longer.

Big Problems in Asia

Musk’s bad gut feeling does not come from nowhere, of course. After all, the most devastating wave of the Corona pandemic is currently raging in China. This is not only reflected in rapidly increasing infection figures, but is also causing an extreme lockdown policy by the Chinese government. The lockdown in the Land of the Rising Sun is having a particularly serious impact on the global economy. Many Western companies that rely on low-cost local production are currently facing factory shutdowns. Tesla is no exception. Indeed, the Gigafactory in Shanghai is currently suffering extremely from the Chinese lockdown. For several weeks, no electric cars could be manufactured there.

Effects also in the West?

Of course, the question now arises as to which jobs will be affected by the planned cuts. Will Musk possibly reconsider his production in Asia to play it safe? Given the lucrative Asian market, this is rather unlikely. After all, China in particular has gigantic potential for all automakers. A fair distribution across the entire globe is probably more realistic. However, this would also mean that the newly opened Gigafactory in Grünheide would possibly be affected.  Unfortunately, Tesla has not yet publicly commented on the issue. It is possible that the next controversial tweet from Elon Musk will soon provide clarification.