Elon Musk seems to have reached the "water reverse period" again. First, Bill Gates, the former world's richest man, responded to the short selling of Tesla and said that the short sellers did not drag him down or hurt him in any way. This drew a sigh from musk. Subsequently, due to the poor economic situation, musk announced that Tesla would cut 10% of its staff.
As soon as the news came out, Ig metall, the largest trade union in Germany, warned musk. This was followed by a sharp fall in Tesla's share price. As of June 3 local time, it closed at $703.55/share, down 9.22%, with a total market value of $728.885 billion. Musk's worth has also shrunk by more than 100billion yuan.
Maybe Musk's attitude changed immediately due to the impact of the stock price crash. On June 4, musk tweeted that although the number of salaried employees is basically the same, the total number of Tesla employees will increase.
Musk's 180 degree transformation has made the mood of employees and investors experience roller coaster ups and downs.
But people who know musk should "get used to" Musk's sudden announcement of layoffs. For musk, who has always been radical, layoffs are just the usual means.
"If you want to fire someone, you should fire them right away, or you will waste each other's time." Musk once said so.
Layoffs under Musk's anxiety
However, musk seems to be full of anxiety about this layoff.
On June 3, musk said in an e-mail to the company's executives that he had a very bad feeling about the economy, and hoped that the company would cut about 10% of its staff and suspend global recruitment.
According to Tesla's annual report submitted to the US Securities and Exchange Commission (SEC) in February this year, by the end of 2021, its global number of employees was 99290. A 10% layoff means that nearly 10000 employees will be laid off.
As soon as the news came out, the market reacted quickly. On June 3, Tesla's share price plummeted by 9.2% to US $703.55, with a market value of 490billion yuan evaporated, and led to a collective plunge in the new energy vehicle sector in the US stock market. At the same time, Musk's personal wealth evaporated 100billion yuan that day.
It is worth mentioning that this is not the first time musk had a premonition that the economy was bad.
At the end of last year, he predicted on twitter that the recession would come in the spring or summer of 2022, no later than 2023 at the latest.
On May 26, when asked "do you think the United States is approaching economic recession", musk replied on Twitter: "yes, but I think it is actually a good thing." he said that it is conducive to the survival of the fittest. When asked further "how long do you think this recession will last", musk said, "according to past experience, it will take about 12 to 18 months."
Apart from the pessimistic forecast on the economy, musk expressed dissatisfaction with the employees of factories in other regions against the backdrop of the "excellent performance" of Chinese employees.
Before musk announced the layoff, he sent an e-mail with the theme of "no longer accepting remote work", requiring Tesla employees to work in the office for at least 40 hours a week, and said harshly: if you don't show up, we will default that you have resigned.
This is contrary to the practice of some other technology companies in the United States. Previously, Google, meta, abiying and other technology companies have begun to allow employees to work permanently remotely.
Of course, it is not a whim to issue orders to force employees to work.
On April 23, musk wrote on his microblog that Tesla China has made amazing progress. According to previous reports, on April 19, Tesla Shanghai Lingang super factory, which was closed for nearly three weeks, returned to work. 8000 employees arrived early in the morning, and nearly 600 finished vehicles were offline on the same day.
On May 11, in an online dialogue held by the financial times, musk said that there will be very powerful companies in China because "there are many very talented people in China who believe in manufacturing. They not only stay up late, but also work conscientiously at 3 a.m. and even don't leave the factory at all. Americans try not to go to work."
Then, on May 16, musk made another speech in an interview with a program praising China: China, the world's second largest economy, will one day dwarf the output value of the United States. In order to compete with China, the United States must "stop internal strife". Musk said: China's economy is twice the size of the United States, and may also be three times the size of the United States.
In response to the question about the acquisition of twitter, he also praised the model of wechat, "if you are in China, you basically have to rely on wechat to live. Wechat has powerful functions, similar to Twitter and paypal payment, plus other functions. These functions are integrated. The interface is also great, which is really a good app."
Just a few days before musk announced the layoff, on May 30, musk once again sent a message on Twitter and Weibo, saying that China is in the world leading position in the field of renewable energy power generation and electric vehicles. No matter what you think of China, this is true.
Musk's appreciation is also reflected in his actions: while announcing the layoffs this time, Tesla continues to expand its recruitment in the Chinese market. According to Tesla China's official website, Tesla China also recently released recruitment information, including a large number of "hot jobs" in Tesla China's R & D and innovation center, covering vehicle software, hardware design engineering, power and energy engineering and other fields. The main work location is in Shanghai.
Layoffs have become a common practice
Musk has always been swift and resolute in downsizing. He once said, "if you want to fire someone, you should fire them immediately, or you will waste each other's time."
Layoffs are no stranger to musk.
As early as 2015, Tesla's performance in China was less than expected because of "acclimatization" in China. According to media reports, Tesla China sold only 120 electric vehicles in January 2015. Musk publicly expressed his disappointment with China's sales performance.
In early February, the restless musk announced layoffs in the Chinese market. An internal email from Tesla showed that musk, who was dissatisfied with the performance, asked for job cuts and claimed that "there is no room for negotiation to personally dismiss those incompetent full-time employees". Tesla China has laid off more than 30% of its employees, that is, 180 of its 600 Chinese employees, involving technical support, procurement, marketing, public relations and other departments.
Then came 2018, when musk had to cut jobs "difficultly" under the difficult problem of profitability. At that time, since the weekly production capacity of model 3 was still at 3500 vehicles, and the profit point could not be reached until it reached 5000 vehicles per week, the production capacity could not be further improved, which further increased Tesla's losses.
According to the financial report, Tesla's gross profit in 2018 was $457million, far lower than the $668million in the same period last year, and its net loss reached $785million, nearly double the loss of $397million in the same period last year.
In the middle of May of that year, Tesla's crisis reached a climax, and some shareholders even chose to "force the palace" and asked for re-election of board members.
In the face of the crisis, musk showed that in June, it officially confirmed the long rumored Chinese factory plan, and the new factory will be named "fearless". Then, Tesla announced that it would cut 9% of its staff, and nearly 3000 employees left Tesla.
Musk said in an email to employees that in order to reduce costs and make the company profitable, we had to make this difficult decision.
After the layoffs, Tesla has indeed ushered in a transformation. In the third quarter of that year, Tesla, which suffered continuous losses, finally realized a profit of 4%; The following fourth quarter was profitable again, although lower than the third quarter.
Only six months after the layoffs in 2018, Tesla started its third layoff. On january18,2019, in order to further cut costs, Tesla announced another layoff of about 7%.
Musk disclosed the reasons for the layoff in the email: on the one hand, it comes from the pressure of price reduction caused by the decline of tax preferences, because the tax relief in the United States will be halved again at that time, which will increase Tesla's car price by $1875. By the end of 2019, the preferential policies will be completely ended. On the other hand, due to the massive layoffs in 2018, which affected the production of Model3, large-scale recruitment was restarted. However, musk said, "last year, it increased by 30%, which is beyond our affordability".
It is worth mentioning that musk likes to lay off employees regardless of whether they are grass-roots employees or senior executives.
In 2008, musk adjusted Tesla's personnel after he became CEO. In january2008, two Tesla founders, Martin Eberhard and mark tapeoning, were fired because of differences in automobile cost control, and some executives left with them.
The former employee once said: "Tesla's vice president is a high-risk profession. There are dozens of senior executives who have voluntarily left because of the conflict between their way of doing things and musk. They have even been fired."
According to financial reports, a former Tesla employee disclosed that two HR vice presidents had been dismissed because workers were often injured in the factory, but the factory injury accident may be due to too many new people or unfamiliar equipment.
Musk's view is that as long as a similar accident occurs, HR fails to fulfill its responsibilities, and someone should be responsible for it.
When another company founded by musk, SpaceX, failed to launch a rocket, he once laid off all the people in one department. Although it was finally found that the failure was caused by the supplier's parts, a rocket launch cost hundreds of millions of dollars. If the rocket was not discovered in time before the launch, he believed that the team should be responsible for this.
For musk, who often talks about layoffs, it seems that this new round of layoffs is really not enough to make a fuss.
Misfortunes never come singly
Musk's "willfulness" made Tesla, but it also caused Tesla to be in trouble for many times.
Matt Maley, chief market strategist of Miller Tabak, an American brokerage firm, said in an interview with Forbes website: "what investors may want most now is to ask musk to shut up."
On the day after the announcement of layoffs leading to the share price, musk said in response to investors' questions on the social platform: "the total number of Tesla employees will continue to increase in the next 12 months, but the number of employees receiving fixed salaries will remain the same."
Even so, it cannot change the fact that Tesla's share price plummeted.
On May 24, Tesla's intraday share price once fell to $620.57, a new low in the past year, with a total market value of only $650.8 billion. Compared with the record high of $1243.49 six months ago, Tesla's share price plummeted by nearly 50% in the first half of the year, nearly "halved", and the market value evaporated by $645.3 billion, or about 4.3 trillion yuan.
By the end of 2021, musk held about 21.2% of Tesla shares. According to this calculation, it lost 911.6 billion yuan in half a year.
But musk is still the richest man in the world.
"The queen kills the queen, and the richest man stabs the richest man in the back." now the world's richest man is still in friction with the former world's richest man.
Earlier, musk wrote on the social platform that "Bill Gates claims to help solve the problem of global warming while shorting Tesla with billions of dollars."
Musk also said that Bill Gates initially short Tesla's position of only $500million, but with the rise of Tesla's share price, Bill Gates now needs $1.5 billion to $2billion to close his position.
According to the data provided by the data provider ortex, as of the closing of US stocks on May 26, short sellers have obtained realized and unrealized gains of US $62.5 billion (about 417billion yuan) from the Nasdaq 100 index dominated by technology stocks this year. Among them, Tesla's short profit reached US $8.2 billion (about 54.6 billion yuan).
In response to Musk's complaint, Bill Gates, the former world's richest man and co-founder of Microsoft, recently responded in an interview: "the people who short Tesla stock did not drag or hurt him in any way."
Musk had no choice but to reply with a sigh under the tweet of the report.
According to the China Securities Journal, the voice of Wall Street not optimistic about Tesla's share price is also increasing. Goldman Sachs, a well-known investment bank, recently directly lowered Tesla's target price from $1200 to $1000. Daiwa Securities lowered Tesla's target price from $1150 to $800.
In addition, its plan to acquire Twitter has also been shelved. According to the latest news on June 7, foreign media quoted insiders as saying that due to the uncertainty of the acquisition, Musk's financing negotiations for the acquisition of twitter have been temporarily shelved.
Layoffs, plummeting stock prices, short selling of the company, and the acquisition of twitter have not been smooth. Musk's recent misfortune can be said to never come singly. But what new troubles will musk, the richest man, have after using the layoff strategy again?