what happened? Tesla is laying off workers in the U.S., but expanding in China

[Rui Kan America] What happened?

Tesla is laying off workers in the U.S., but expanding in China

　　Zhongxin Finance, June 8 (Shen Jincheng Gong Hongyu) Tesla, the world's top 1 in the automotive industry by market capitalization, is about to lay off a lot of employees?

Recently, Musk's statements in the company's e-mail, "I feel bad about the economic trend" and "I want to lay off 10% of the staff" have caused a thousand waves.

　　As an American company, Tesla’s current round of layoffs and hiring will face the global business chain, and local American employees may bear the brunt.

However, what is interesting is that under Tesla’s global layoffs, its R&D center in China has continued to release recruitment information recently.

what happened?

FILE PHOTO: Tesla CEO Elon Musk.

Tesla layoffs or microcosm of US recession

　　According to Reuters, Musk recently wrote to employees that employees must stay in the office for 40 hours a week, "or they will leave."

Later, Musk said in an email to Tesla executives that not only would Tesla consider layoffs, but global hiring would also be halted.

　　Immediately afterwards, Musk sent an email to employees to "supplement" that the layoffs would affect white-collar workers in the office, excluding workers on the production line.

　　Affected by the news, Tesla's stock price suffered heavy losses.

Last Friday (June 3), it fell more than 9% in a single day, and its market value decreased by 10 billion US dollars.

　　The reasons for Tesla’s layoffs have also sparked a lot of speculation and discussion.

On the one hand, Tesla's move is considered to be "de-fire" for the previous large-scale expansion.

　　In 2021, Tesla's global vehicle production will reach 930,422 units, an increase of 83% year-on-year, and deliveries will reach 936,000 units, an increase of 87% year-on-year.

In the first quarter of 2022, Tesla’s net profit attributable to its parent was as high as $3.32 billion, a year-on-year increase of more than six times.

　　Even as revenue steadily increases, Tesla's global scale is rapidly expanding.

In March and April 2022, Tesla opened Gigafactories in Berlin, Germany and Austin, Texas, USA.

The company hired 28,533 new employees in 2021 alone, and the number of employees has almost doubled in the past two years.

　　In this regard, some media pointed out that the surge in the number of employees has made Tesla's office buildings in the United States stretched, and the rapid expansion has also brought management concerns.

　　On the other hand, the economic downturn has also prompted many companies, including Tesla, to put layoffs on the agenda.

In the first quarter of 2022, the real GDP of the United States fell by 1.4% on an annualized basis, far lower than the 6.9% in the fourth quarter of last year. This is the first time the US economy has contracted since the second quarter of 2020.

　　A Bloomberg research report pointed to a 25 percent chance of a U.S. recession in 2022 and a near 75 percent chance of a recession in 2023, in part because the Fed's measures to curb inflation will tighten financial conditions and slow the U.S. economy. economic growth.

　　Not only that, the extremely severe inflation situation and rising prices have plagued American consumers for several months. When wage increases cannot keep up with price increases, consumers may consider the cost of living and reduce purchasing demand.

　　It's not just Tesla, a US company, that is shrouded in the shadow of a recession.

Before Musk's announcement of layoffs, some U.S. tech companies had already started freezing hiring or laying off workers.

　　For example, Paypal started laying off workers in the last week of May, and Uber said in early May that it would scale back hiring.

Tech giants such as Microsoft, Netflix, and Meta have also successively released information on hiring freezes.

Operations in China are not affected, and there are over 100 job postings on China’s official website

　　According to Tesla's 2021 annual report, Tesla and its subsidiaries employ 99,290 people.

If the 10% layoffs are true as Musk said, nearly 10,000 employees worldwide will be affected.

　　However, amid the global layoff crisis, the hiring of Tesla's China R&D center is still in full swing.

　　Zhongxin Finance noticed that there are still more than 100 job postings on Tesla's official website in China, involving more than 60 cities, and the positions are concentrated in Shanghai and Beijing.

On the 22nd of last month, Tesla China also newly released the recruitment information for 104 positions in the Shanghai R&D and Innovation Center, covering five different business areas: vehicle software, hardware design engineering, power energy engineering, regulatory certification and vehicle engineering.

Since the resumption of work and production on April 19, as of April 30, Tesla's Shanghai Gigafactory has rolled off 10,000 vehicles.

Photo courtesy of the interviewed company

　　The relevant person in charge of Tesla China recently told the media that the R&D center, design center, and charging and sales service departments have been recruiting.

　　Musk said at the Auto Summit in May that Chinese workers are hard-working. “

.”

　　With the improvement of the epidemic situation in Shanghai, Tesla's Shanghai factory has gradually resumed normal operation. This news also increases the outside world's confidence in the stable operation of Tesla's China factory.

　　Data shows that from January to April 2022, Tesla’s Shanghai Gigafactory has delivered 183,686 vehicles, which is more than 1.7 times the delivery volume in the same period last year, and even surpassed the delivery volume in 2020.

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