Economy

Tesla begins 10% staff cut as layoffs pace up with US recession fears

Meta, Amazon, Walmart, Uber, Microsoft, Twitter have slowed or halted hiring

Ovunc Kutlu   | 17.06.2022
Tesla begins 10% staff cut as layoffs pace up with US recession fears

ANKARA

US electric carmaker Tesla has begun 10% staff cuts, as layoffs paced up with recession fears in the American economy, with many companies either trimming their workforce or slowing down and freezing hiring.

The workforce cut in Tesla started last week, according to the laid-off employees' posts on LinkedIn.

"Tesla and I have parted ways, after 10 long years and many cherished experiences, it is over. Yes, I too was part of the 10% layoff and was blindsided by the event," a maintenance technician wrote on Thursday.

"I am deeply saddened to announce that I was one of the 10% let go during the #tesla #layoffs due to being both salaried and a remote worker," an instruction designer said.

An analyst said: "News of being part of the Tesla layoffs has come as a shock to me. Due to recent change in Remote work policy and 10% reduction in salaried employees, my journey with #tesla has come to an end."

A technical program manager noted that he was let go after five years with the company, adding: "Last Friday I found out I was one of the ones impacted by the 10% layoffs happening at Tesla."

CEO Elon Musk announced on June 3 that he decided to cut Tesla's salaried workforce by 10%, while he said in an earlier email to executives that he has "a super bad feeling" about the US economy, referring to recession fears.

Musk on June 1 also gave an ultimatum to company executives, either to return to work at the office or leave the firm, in an email that quickly circulated on social media.

"Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla. This is less than we ask of factory workers," read the email with the subject, “Remote work is no longer acceptable.”

The company's workforce stood at 100,000 by the end of 2021, according to a Securities and Exchange Commission (SEC) filing.

Many firms slowing down or freezing hiring

Tesla is not the only US company that cuts workforce, as financial markets are in turmoil, inflation is at a record 40-year high, and the US Federal Reserve's aggressive monetary tightening fuels recession worries.

The US-based cryptocurrency exchange platform Coinbase Global announced Tuesday that it will reduce the size of its workforce by 18% due to turmoil in the crypto market, which lost more than $1 trillion in market cap in just a few weeks.

"We appear to be entering a recession after a 10+ year economic boom. A recession could lead to another crypto winter, and could last for an extended period," Coinbase CEO and Co-founder Brian Armstrong said in a statement.

With the Fed's rate hikes raising borrowing costs, especially in the housing market, mortgage rates jumped from 3.3% in January to 6.3% last week.

Real estate companies Compass and Redfin announced Tuesday that they are trimming their workforce by 10% and 8%, respectively, according to an SEC filing.

The US-based online personal styling service Stitch Fix announced on June 9 it is cutting off 15%, around 330 people, of its salaried workers, adding its estimates to save $40 million to $60 million with the layoffs.

Netflix, the global streaming service and production company, announced in May that it laid off around 150 people, as the firm struggles with subscriber losses and slowing growth.

The company reported in April that it had lost 200,000 subscribers during the first three months of 2022, marking its first quarterly loss in users since October 2011, while it cited account sharing, revenue decline, and rising competition as major issues.

Among major American companies, Meta, formerly Facebook, e-commerce firm Amazon, retail supermarket chain Walmart, mobility provider Uber, tech major Microsoft, and Twitter have either slowed or frozen hiring.

Cloud-based software firm Salesforce and e-commerce furniture and home goods company Wayfair have also slowed down their hiring.

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