Tesla will cut 10% of its paid staff, Musk tells employees

Elon Musk, CEO of Tesla, told employees in an email on Friday that he plans to cut the electric car maker’s pay by 10 percent.

He said job cuts would not apply to employees who make cars or batteries or install solar panels, and that the number of hourly staff would increase. Musk said in an email that a copy had been reviewed by The New York Times. “Tesla will reduce the number of paid heads by 10 percent because we have become overstaffed in many areas,” he said.

For Tesla executives only Mr. Reuters reported earlier quoting a different email sent by Musk. The automaker’s share price fell about 9 percent on Friday after the article was published.

Tesla’s employees have grown significantly, increased sales and built new factories, which opened this year near Berlin and Austin, Texas. The company employed more than 99,000 workers at the end of last year. Two years ago, Tesla had 48,000.

For requests for comment Mr. Musk and Tesla did not respond.

Earlier this week, Mr. Musk told employees at his rocket company Tesla and SpaceX that they are expected to spend at least 40 hours a week in their offices.

In an email sent to SpaceX staff on Tuesday, Mr. Musk says, “The more senior you are, the more you know your balance.” That’s why I spend so much time in the factory – those in line can see me working with them. If I had not done that, SpaceX would have gone bankrupt a long time ago.

The announcement was made by Mr. Musk and his companies were pushed into a heated debate over the right approach to restoring normalcy after two tumultuous years of epidemics. It also called for concern that he might chase away the best artists who want to continue working at a distance for some time or all time.

New layoffs will not be made at Tesla in the first place. The automakers also fired some workers 2017 And 2018.

In recent weeks, investors Began to investigate The skyrocketing stock price of the company. The market value is over $ 728 billion, which is more than many major automakers. Tesla’s shares are down nearly 40 percent from last year’s high, focusing on the risks the company faces due to growing competition, allegations of racism and production problems at its plant in Shanghai.

Some critics say Mr. Musk sees the attempt to buy Twitter as another distraction that could hurt Tesla. A major concern for some investors is that the Vehicle Manufacturers Board does not have enough independence from the CEO to act as a check for him and his impulses.

“From a corporate governance perspective, Tesla has a lot of red flags,” said Andrew Boreda, a senior analyst specializing in socially responsible investment at Sage Advisory Services, an investment firm based in Austin. Told the Times last month. “Almost no checks and no balances.”

Mr. Muskin’s management style and success – listed by the world as the richest man in the world by Bloomberg and Forbes – have made him a lightning rod, despite having admirers. Tesla has lost many top executives in recent years, many of whom have moved on to higher positions in other automakers, technology companies and battery makers.

Recently, Mr. Musk praised the work ethic in China, where labor conditions can be harsh or abusive, suggesting that workers in the United States are lazy. “They will not only burn the oil at midnight. They will burn the oil at 3 in the morning. He spoke about Chinese workers in an interview with The Financial Times. “So they do not even leave the factory types. In the United States, people are trying to avoid going to work.

However, some analysts are optimistic about Tesla’s prospects. “In our view, Tesla does not need to hire more staff to sustain its growth, and the redundancy plan shows that Tesla hired last year,” said Seth Goldstein, Morningstar’s senior stock analyst. Said in a note On Friday.