FRANKFURT – Elon Musk, CEO of Tesla (NASDAQ: TSLA), told top managers that he had a “super bad feeling” about the economy and that the electric car company needed to cut about 10% of its staff, according to an internal email that Reuters saw.
The email, which was sent to Tesla executives on Thursday and said “stop all hiring worldwide,” showed that the global economy was getting worse as prices went up and the war in Ukraine went on for its 100th day.
Musk’s message came soon after Jamie Dimon, chairman and CEO of JPMorgan Chase (NYSE:JPM), said that the problems facing the U.S. economy were like a “hurricane.”
Here’s how I feel about the comments:
AUTOMOTIVE ANALYST AT NORDLB FRANK SCHWOPE:
“I think that the statements are a warning… in case the economy gets worse.”
“Right now, all car companies are having a lot of problems, like supply chain problems caused by the coronavirus and the war in Ukraine, factories closing in China, supply shortages, and so on.”
“Since the coronavirus pandemic started, many plants haven’t been working at full capacity. It’s easy to see why the car companies want to cut costs.”
Senior Financial Markets Analyst at City Index in London, FIONA CINCOTTA
“Even though the Fed thinks it’s possible for the economy to have a soft landing, there are some signs that it might not. We know that growth is slowing and that inflation is still high, and we also know that the Fed will have to take strong action to bring inflation down.”
“The question is whether or not they will be able to act as aggressively as they need to. Elon Musk doesn’t think they will be able to do this without causing a deep recession. The slowdown in China is just one more problem.”
LORENZO CODOGNO, HEAD OF LC MACRO ADVISORS AND FORMER CHIEF ECONOMIST AT THE ITALIAN TREASURY:
“It is clear that when prices go up, people will spend less. We will have to deal with that.”
“If the rise in inflation starts to go away at the start of next year, it probably won’t have as big of an effect on the world economy as Musk seems to think.”
“And if the shock is only temporary, companies are likely to want to keep their human capital.”
DANIEL IVES, MANAGING DIRECTOR AND SENIOR TECH ANALYST, WEDBUSH SECURITIES
“This message will look bad at first glance to Street,” Ives wrote on Twitter (NYSE:TWTR).
“The Twitter deal is still the biggest issue in the room. More bad news from Musk about the economy, and what’s next in the Twitter saga?”
CARSTEN BRZESKI, ING’S GLOBAL HEAD OF MACROECONOMIC RESEARCH
“Many people agree with Musk’s bad mood.”
“We’re talking about stagnation and a global economy that needs major structural changes like decarbonization, deglobalization, and adjusting to older societies.”
“But we’re not talking about a worldwide economic downturn. We think that the world economy will slow down by the end of the year. The United States will slow down, but China and Europe will not get better.”
“But letting people go is not the best thing to do. In the future, we will need people with skills more than ever. This could lead to people being fired and then hired, “he said.
Chief Investment Officer at Prime Partners, François Savary
“In the end, it’s easy to say things like this. Everyone has fears, but so far there is no reason to be so pessimistic.”
“Yes, there is a chance of a recession, but you need to see numbers going in that direction, and there aren’t any yet.”
“A lot will depend on how things go in the job market. If the U.S. job market gets worse by a lot over the summer, then there is a chance of a recession next year.”
