To The Moon

Tesla (TSLA) is freezing hiring and needs to cut staff by about 10%. On Thursday, $Tesla (TSLA)$ executives received a "pause all hiring worldwide" email from Musk. Musk said he had a "super bad feeling" about the economy. 

In recent months, musk must have been difficult. All kinds of major decisions and huge fluctuations in the stock price have made everything passive.

Tesla has about 100,000 employees. If 10% of the employees are laid off, it will be about 10,000 people. This is the largest layoff in Tesla's history.

Layoffs are also on the horizon. Earlier, Musk issued a "compulsory arrival order" to employees, requiring employees to work in the office for at least 40 hours a week, or resignation. The move is also seen as a disguised layoff of employees who are determined to be unable to return to work, and the company can save a severance pay.

The incident of "10,000 layoffs" was too shocking. On Friday,$Tesla Motors(TSLA)$'s stock price collapsed, plummeting 9.22% in one fell swoop, evaporating $74 billion in market value overnight, and the three major US stock indexes fell collectively.

Why lay off staff? There are two reasons.

First, there are too many recruits. According to Musk's email, the main reason is that the company has overstaffed in many areas. Over the past three years, Tesla has more than doubled its workforce, and while revenue has grown 36% annually, revenue per employee has grown by just 7%.

At the same time, the new energy industry is also plagued by supply chain and other issues, and analysts have lowered Tesla's delivery forecasts.

This wave of layoffs has laid off those who had recruited more and more expensive workers in the past few years, and then took advantage of the bad economic situation to recruit some relatively cheap labor, which not only reduces corporate expenses, but also streamlines company operations.

There is also a very important reason, that is, Musk's words "super bad feeling" about the economy.

Some people say that Tesla is like a "canary in a coal mine". Any subtle changes in the industry can be responded to in the first time. Therefore, Musk's information has also been expressed by Morgan Stanley and other institutions. , with considerable credibility.

As early as early December 31 2021, Musk tweeted a pessimistic view on the economic situation in 2022, and predicted "maybe around spring or summer 2022,but not later than 2023"Sure enough, U.S. stocks fell sharply in February, with the three major stock indexes all down more than 3% in February.

At the end of May, Musk publicly predicted that the U.S. economy may face a recession, and this crisis will last at least a year to a year and a half.

Morgan Stanley analyst Adam Jonas said:

"If the world's largest electric vehicle company warns about layoffs and the economy, investors should rethink their forecasts for margins and revenue growth."

Goldman Sachs President John Waldron also pessimistically predicted that the future will enter a difficult period due to a series of shocks to the global economy.

There are, of course, opposing views, with Goldman Sachs analyst Jan Hatzius saying that unless new negative facts emerge, fears of an economic slowdown "will be overblown."

In the past six months, $NASDAQ(.IXIC)$ has fallen by more than 25%, and Tesla has also fallen 43% from its highest stock price in November last year. Musk, the always confident "madman", has begun to be cautious. This recession.

Perhaps the movement was too loud, and Musk put out the fire again on Sunday, saying that "Total headcount will increase,but salaried should be fairly flat"Finally, let’s talk about your thoughts on Tesla’s layoffs:

What do you think of this wave of layoffs at Tesla?

What do you think Tesla's layoffs reveal?

What do you think about the future market?

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