Report: Tesla To Freeze Hiring And Launch New Wave Of Layoffs

The unofficial info comes from a "source familiar with the matter."

Tesla Giga Texas (Tesla Gigafactory 5)

Mark Kane

By: Mark Kane

Dec 21, 2022 at 9:42am ET

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The end of the year brings some worrying signs about Tesla, which might be forced to reduce its headcount once again.

According to Electrek, a "reliable source familiar with the matter" said that Tesla has communicated to some employees that it is implementing a hiring freeze. Not only that. Next quarter (Q1 2023) the company will launch a new wave of layoffs, the article says.

So far, the info has not been confirmed officially, but it's very interesting, especially in comparison with the falling price of Tesla's stock.

The quarterly results were pretty good this year with a record sales volume of electric cars. The company is also launching new products like the Tesla Semi plus expanding the production of the Megapack battery energy storage systems. Is there anything to worry about?

Well, recently we heard that Tesla's estimated global electric car backlog significantly decreased below 200,000 units. That might be related to increased production output (two new plants - in Europe and in Texas, are producing now 3,000 Model Y per week).

Another thing might be weakened demand - first it was suggested in China, where, according to media reports, inventory was increasing at a record rate. In the US, the upcoming eligibility of the $7,500 federal tax credit probably caused a delay in purchasing decisions to 2023 and prompted the company to add new incentives.

Is this enough to adjust headcount and prepare for some kind of economic slowdown? Well, we don't know. Tesla was profitable with above-average margins on its electric cars, which means that in the worst-case scenario, it could attract more customers through some price reductions.

What do you think?

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The effective price of new Tesla EVs in the US will actually be reduced through the federal tax credit, so it's really difficult to say anything without seeing the company's internal data.

Let's also not forget that the company has to prepare for the Tesla Cybertruck launch within about a year from now, which also would require additional employees - compensating for the eventual layoffs in other areas.