After VCs, entrepreneurs and startup accelerators, the world’s richest man has also chimed in on the state of the economy, and it isn’t good news.
Elon Musk has directed Tesla to immediately “pause all hiring worldwide”, as per an internal email seen by Reuters. Musk has also said that Tesla would need to cut 10% of its jobs. Tesla has as many as 1 lakh people around the world, which could mean Tesla would lay off as many as 10,000 people. Musk said that moves were necessitated by external factors, and he had a “super bad feeling” about the economy.
Musk is the latest in the series of business figures which have raised alarm bells about an upcoming recession. “No one cannot predict how bad the economy will get, but things don’t look good,” Y Combinator, which is one of the world’s best startup accelerators, had told portfolio companies last month. Sequoia Capital had called the downturn a “crucible moment”, and said it would present “challenges and opportunities” for many of its portfolio founders.
These concerns seem to be shared by several startups in India, many of which have laid off employees over the last few weeks. MPL and FrontRow had fired 100 and 145 employees respectively last week. Prior to that, healthtech startup MFine had laid off 500 employees, while unicorns Cars24 and Vedantu had fired 600 and 424 employees respectively. Unacademy too had laid off 1,000 employees, and e-commerce unicorn Meesho had fired 150 employees. Trell, Lido Learning, and Furlenco have all fired more than a hundred employees each in recent weeks.
But Tesla firing 10% of its workforce will make people sit up and take notice — Tesla is profitable, and is one of the world’s most valuable companies. Musk, for his part, is the richest man in the world, and would likely be well placed to weather an upcoming economic downturn. But Musk also has a unique vantage point to be commenting on the economy — Tesla operates in several countries around the world, and its supply chains span the globe. Apart from Tesla, Musk also runs a series of other diverse businesses. If he takes measures as drastic as laying off 10,000 people because he has a “super bad feeling” about the economy, the world would do well to listen.