Tesla Is Expected to Freeze New Hires, Lay Off More Staff

Tesla has reportedly informed its staff that it would enforce a hiring freeze and that another round of layoffs will take place in the upcoming quarter, said an insider.

Notably, CEO Elon Musk requested a 10% reduction in employees and a pause on hiring at Tesla back in June.

The CEO has cited his "very bad feeling" about the economy, among other reasons, in justifying the layoffs.

Tesla's 1st-Quarter Plan

A person familiar with the situation told Electrek that Tesla would soon adopt a hiring freeze and conduct further layoffs.

According to the report, workers at Tesla have been informed that the company is temporarily halting hiring. As if the hiring freeze were insufficient, Tesla also announced that teams would be required to make layoffs in the first quarter of 2023.

As Tesla still intends to grow in certain industrial hubs, it is unclear how broad the employment limit will be. Currently, there is a lack of information.

Electrek believes inefficient recruiting practices have contributed to Tesla's rapid expansion over the years, forcing this new wave of layoffs.

More concerning than the typical "hiring pause" was the fact that Tesla has to employ thousands of workers at new plants in the US and Germany to keep up with its booming plans.

When the second part of the year rolled around, though, Tesla soon ended its employment freeze and resumed huge growth.

Is the Demand for Electric Cars Below Expectations?

Despite setting new records almost every quarter, Tesla's stock has been sliding steadily this year, prompting the changes. While a general market decline in 2022 is to blame, its stock has not been trailing the market in recent months.

These more recent declines coincide with Musk's purchase of Twitter and his sale of Tesla shares to fund the transaction.

There have been hints emerging recently that Tesla's issues extend beyond the stock market.

Some analysts have speculated that Tesla is having unusual demand issues because of the temporary discounts and incentives it has been offering on its cars.

But Tesla is not the only company to have to lay off employees. Goldman Sachs and Cisco are just two of the many corporations that have announced impending waves of layoffs as they prepare for the expected shift in macroeconomics at the beginning of 2023.

Tesla Is Still Under Fire

This news came out after the other that indicates Tesla is under scrutiny for allegedly terminating employees for voicing criticism of its CEO.

Tesla is accused of terminating two California staff in June who submitted letters criticizing Musk's work and his Twitter conduct, as per the report.

One draft letter to Tesla officials questioned the May policy requiring all staff to report to work. Musk's tweets allegedly violated the firm's anti-harassment policy.

The draft letters were never distributed internally, but both workers believe they were dismissed for raising the problems.