Musk: "3.5% Workforce Reduction Over Three Months... High Possibility of Economic Recession"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Elon Musk, CEO of Tesla, announced that he plans to reduce the workforce by 3.0 to 3.5% over the next three months. Regarding the recent debate over a recession in the United States, he predicted that the likelihood of entering a recession in the near future is "quite high."

On the 21st (local time), Musk made these remarks during an interview with John Micklethwait, Bloomberg's editor-in-chief, at the Qatar Economic Forum hosted by Bloomberg News.

He explained that the recent announcement via email about a 10% workforce reduction means laying off 10% of full-time employees. At the same time, the number of part-time workers will be increased. According to Musk, the employees affected by this reduction will amount to about 3.5% of the total workforce.

Musk said, "We grew too fast in terms of full-time employees," and that a 3.0 to 3.5% reduction in the total workforce is "not a very big deal." However, he predicted that Tesla will increase hiring again, stating, "One year from now, both full-time and part-time employee numbers will be higher than they are now." According to the Wall Street Journal (WSJ), Tesla's total workforce surged from 69,000 at the end of 2020 to 100,000 at the end of last year.

Regarding a lawsuit filed by employees recently laid off from Tesla's battery factory in Nevada, claiming they were subjected to "mass layoffs without prior notice," Musk dismissed it as "a small lawsuit with no significant impact," expressing frustration that "anything related to Tesla, even bicycle accidents, gets huge headlines."

When asked about the possibility of a recession, he responded, "It is inevitable at some point," and said the likelihood of it happening soon is quite high.