Elon Musk’s office is on the verge of a layoff threat over work orders

After emailing his company’s top managers last week demanding all employees return to office, Tesla CEO Elon Musk has indicated he wants to cut 10% of his workforce in anticipation of a bad recession.

On Thursday, Musk sent a follow-up email asking executives to “stop all hiring worldwide” and said he planned to lay off 10% of Tesla’s staff, according to Reuters, which received a copy of the first message. Another email followed the same day, clarifying that Tesla White-collar workers had been shot at.

“Tesla will reduce the number of salaried employees by 10% because we have become overstaffed in many cases,” Musk said in an email.

Homa Bahrami, senior lecturer and faculty director at Haas School of Business, UC Berkeley, Calif., Said Musk’s initial return-to-office mandate could be an attempt to more systematically retrench the Tesla workforce.

Brian Crop, Gartner’s prominent vice president of HR practice, agrees with Bahrami, arguing that office work orders will have a winning effect on the employee base.

At the same time, in an environment where tech companies’ share prices have plummeted over the past few months, many companies are looking to steal the talent of competitors like Tesla.

“Look, Elon Musk is a very smart guy. There may be 20% or 25% of employees who eventually leave, and they probably want to leave, but a good portion of that 25% is in demand at other companies, “Krop said in a previous email to ComputerWorld.

On May 25, Gartner voted for 350 human resources executives and leaders across the industry spectrum, most of them in North America. The majority (66%) complained that their companies expect business revenue growth in the next quarter; Only 4% indicated that they expect to start pruning.

Guarantor HR Pole 2 Gartner

Sixty-four percent of those surveyed said they had no plans to cut staff, and only 15% indicated they had plans to reduce hiring for non-critical roles. Recruitment is expected to slow down to just 9% for all roles.

Even as the U.S. economy plunges into recession, only 31% of HR executives say their companies will slow down hiring – and only 11% say their companies will start layoffs. In fact, 50% of those surveyed expect talent competition to increase in the next six months, despite economic headwinds.

Jack Gold, chief analyst at Jay Gold Associates, said he expects some downturn in economic activity. “We’re already seeing it,” he said “And as interest rates rise, it makes buying a new car even more expensive – an EV or gas-powered one. So, planning for a slowdown is probably the right move.”

Gartner HR Poll 4 Gartner

But there is another factor in the game. Musk and Tesla initially dominated the EV market, but there has been a sea change with rival companies now challenging it for the top spot.

“There are major competitors – not just startups like Rivian, but Ford, GM, Hyundai, etc. – who are now pushing their new EVs. This will affect Tesla’s sales, although it remains to be seen how much it will hurt them in the long run, “Gold said.

Tesla is opening major new EV manufacturing facilities in China and other countries and this could have an impact on corporate recruitment as jobs move to new locations and potentially lower wages, Gold noted.

“It’s hard to judge at this point how much of this is part of the equation, but I hope it will have some effect on the hiring decision,” Gold said. “And while Tesla is doing well in China right now, there’s a lot of local Chinese coming to the competition line.

Gartner HR Pole 3 Gartner

Musk will regret his mandate and pruning strategy, Lewis said, because he has bet his employees and their priorities will be vastly different from those of other companies. Balance

“He originally launched a massive advertising campaign that Tesla is an ‘office-office-cable’ company, which could be very problematic for those trying to build a candidate pipeline for them,” Lewis said.

Copyright © 2022 IDG Communications, Inc.

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