According to Reuters, Tesla boss Elon Musk sent an internal e-mail to the company’s managers, stating that he now feels “super bad” about the economy and that the company must stop recruiting new employees and lay off ten percent of the current ones. That would mean about 11,000 people.
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Markets reacted immediately to the information and Tesla’s shares are falling. After the stock exchange opened, their value in the first quarter fell from 740 to $ 717.
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Tesla focuses on the production of electric cars and is significantly involved in, for example, space mining. It currently employs around 110,000 people.
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Tesla’s boss sent the email on Thursday. The carmaker has not yet commented on the content of the e-mail when asked by Reuters.
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Musek’s clear warning about a potential economic recession and the impact on automakers is the most direct and most closely watched forecast of its kind for the sector so far. Despite this, demand for Tesla cars and other electric car manufacturers remains strong for the time being, and traditional economic indicators do not yet point to the beginning of the recession.
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What is Tesla?
– Tesla is an American carmaker that mainly produces electric cars. It is also an energy company.
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– Headquartered in Palo Alto, California.
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– Other Tesla products include Powerwall home energy storage, Powerpack commercial storage and solar roof tiles.
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– The company was founded by Martin Eberhard and Marc Tarpenning in 2003. It was named after electrical engineer and physicist Nikola Tesla.
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However, Tesle has not yet been able to completely resume production at its plant in Shanghai, where local authorities have ordered strict closures in connection with the further spread of the coronavirus infection. These restrictions are gradually being lifted from Wednesday this week.
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But Musk is not the only one who warns of problems. JPMorgan Chase & Co CEO Jamie Dimon and Goldman Sachs President John Waldron, for example, see the economic development in the coming months. “A hurricane is sweeping us,” Dimon said this week.
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The inflation rate in the United States was 8.3 percent in April, and although it fell slightly from March, it remains close to its highest level in 40 years. This means that the cost of living for Americans has increased significantly in recent months.
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Musek’s words that he has a “super bad feeling” about the economy provoked a wave of reactions on Twitter and beyond. “It is clear that rising prices will weaken consumption. That’s something we have to prepare for, “said Lorenzo Codogno, founder and head of LC Macro Advisors, who previously worked as chief economist at the Italian Ministry of Finance.
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“Although the US Federal Reserve thinks it can ensure a smooth landing, there are some warning signs in the economy,” said Fiona Cincotta, an analyst at City Index in London. According to her, the question is whether the Fed will be able to act as vigorously as necessary. “Elon Musk clearly thinks the Fed will not be able to do that, because it would put the economy in a deep recession. And another problem is the slowdown in economic growth in China, “she added.
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This week, Musk asked employees to quit their homes and return to their offices. He also wrote this in internal communication, which penetrated social networks. “We require everyone at Tesla to spend at least 40 hours a week in the office,” Musk wrote in an email Tuesday night. “If you don’t show up, we’ll assume you’ve resigned,” he added. However, the request to return to the offices met with a negative response, especially in Germany.
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Prior to Musk’s warning, which managers received in an e-mail entitled “Stop recruiting around the world”, Tesla offered about 5,000 jobs on the LinkedIn professional network. She was looking for sales staff in Tokyo, engineers for her new large factory near Berlin, or experts in so-called deep learning at the Palo Alto Technology Center in California.
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At the end of May, one of the Twitter users, Muska, asked if the economy was heading for a recession. “Yes, but that’s good. “It’s been raining money for fools for too long, now we have to see some bankruptcy,” Musk replied. On another occasion, he spoke of the automatic clean-up of the economy in times of recession, when weak businesses may not survive.
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Musk is the richest man in the world, according to the Bloomberg agency, he currently has assets worth about $ 227 billion (CZK 5.2 trillion). Amazon founder Jeff Bezos is in second place with $ 149 billion in assets.
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