Since mid-May, real-time indicators warned the labor market had hit a brick wall. Piper Sandler predicted last week that up to a million layoffs or more were ahead as the US economy is on the verge of recession.
The latest sign of an impending job market shock is an email seen by Reuters from the world’s richest man, Tesla CEO Elon Musk, who told executives the electric carmaker needs to cut staff by 10% because he has a “super bad feeling” about where the economy was headed.
The email, titled “pause all hiring worldwide,” was sent to executives on Thursday and is the latest sign of mounting macroeconomic headwinds as lower-than-expected US new car sales in May could be a harbinger of a recession.
“God has shown Pharaoh what He is about to do. 29 Indeed seven years of great plenty will come throughout all the land of Egypt; 30 but after them seven years of famine will arise, and all the plenty will be forgotten in the land of Egypt; and the famine will deplete the land.” Gen. 41:28-30
In an another email Tuesday, Musk told employees:
“Everyone at Tesla is required to spend a minimum of 40 hours in the office per week … If you don’t show up, we will assume you have resigned.”
On Wednesday, Musk tweeted: “Recessions serve a vital economic cleansing function.”
Tesla, which has EV factories worldwide, including ones in the US, Berlin, and China, employs about 100k staff, so reducing 10% of jobs could equate to 10k people.
Musk’s stark warning of impending economic doom and the need for job cuts sent Tesla shares down nearly 4% in premarket, dragging down Nasdaq 100 futures about half a percentage point and other electric carmakers.
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