Elon Musk’s Tesla is reportedly planning to implement a hiring freeze. Also, it plans to conduct a round of layoffs in the next fiscal quarter. The company stock tumbles while Musk comes under fire for his handling of Twitter.
Musk announced in a tweet on Wednesday that he is “actively looking” for a successor as Twitter CEO, following up with a late-night tweet saying he would step down as soon as he finds “someone foolish enough to take the job.” Musk has come under fire since he completed his $44 billion purchase of the platform in October. Over the past week, he has been called out for suspending multiple journalists as well as an account linking to rival social media platform Mastodon—Musk claims those accounts linked to another account that posted information on the location of his private jet.
He restored some journalist’s accounts on Saturday, although others appealed the suspension after they were asked to delete a tweet referencing the account that posted information on Musk’s jet. After Tesla’s first round of layoffs in June, two former employees sued the company, claiming it violated federal laws by failing to provide advance notice on mass layoffs to employees who would be affected by the cuts.
More than 500 employees were let go in that round of cuts, according to the suit. Tesla stocks also took a nosedive after Musk—who also owns SpaceX—announced he took a 9% stake in Twitter in April, with shares falling 64% since then and 39% since he officially took over on October 27. Tesla is the 490th best-performing stock on the S&P 500’s year-to-date returns, dropping 57.45% since the beginning of the year.
It’s not clear how extensive the hiring freeze will be as Tesla is still planning to expand in some manufacturing locations. No further details were made available at this time. The moves come as Tesla’s stock has been falling all year despite the company’s financials hitting new records virtually every quarter.
Some signs have also crept in as of late indicating that Tesla’s problems are not just on the stock market. The automaker has recently started to offer temporary discounts and perks on its vehicles – leading to the belief that Tesla is potentially facing some rare demand problems. However, Tesla is not alone in implementing layoffs. Several other companies, including Goldman Sachs and Cisco, have announced upcoming rounds of layoffs lately in anticipation of changing macroeconomics in early 2023.