Elon Musk needs to cut one in ten jobs at Tesla. Some may already have their eye on the exit.
Elon Musk needs to cut one in ten jobs at Tesla. Some may already have their eye on the exit. The Tesla chief executive’s intentions, conveyed in an internal email seen by Reuters, are rooted in what he described as his “super bad feeling” about the U.S. economy. Some of the nearly 100,000 people employed at the electric carmaker may already be considering their options after Musk issued them with a return-to-office ultimatum this week.
In an email sent to staff Tuesday night, Musk threatened to fire anyone who did not work in the office 40 hours a week, a sharp contrast to flexibility offered by Big Tech companies that compete for the same talent pool.
The office edict, on top of a steep drop in Tesla’s share price this year – partly due to Musk’s costly pursuit of Twitter – and his public alignment with the Republican party are a toxic mix for some staff. “Tesla is kick-starting its own local Great Resignation,” said Stanford University economics professor Nicholas Bloom, who predicted that 60% of employees would return to the office full time, about 10% would quit, and about 30% would look for another job. Tesla did not immediately reply to a request for comment. Some tech companies, sensing an opening, were quick to swoop. Scott Farquhar, Australia’s third-richest man and the co-founder of software maker Atlassian, tweeted about plans to expand and offer flexibility. “Any Tesla employees interested?” he added. In the wake of the COVID-19 pandemic, more and more tech workers, used to working from home or hybrid policies, are refusing to come back to the office full-time.
One former Tesla engineer told Reuters he recently took a job at Alphabet because of the lack of work-life balance, including pressure to come into the office during the pandemic. At Google, he has to come to office only three times a week, with some of his team members working remotely, he said. He said his friends working from home “are not less productive, but significantly happier.”
Another former Tesla engineer said he had been under pressure to work in the office during pandemic in 2020 and got Covid twice – before moving to Apple. Bigger Stock Compensation The threat of layoffs and the return-to-office order come as Tesla engineers are watching their stock-based compensation drop. Tesla faces some of the same problems assailing other companies, such as China lockdowns.
But investors also are concerned that Musk’s $44-billion pursuit of Twitter is distracting him, despite Musk’s contention that he spends relatively little time on it. Tesla stock fell 9% on Friday after Reuters published his staff cut plan and Twitter said the Musk acquisition had passed U.S. antitrust review. The stock had already been down about 30% since Musk announced his purchase of shares in early April, roughly double the drop of the Nasdaq index.