January 28, 2023

Hardwood Paroxysm

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Musk and the Tesla problem: Stop hiring and layoffs on the horizon

Layoffs are expected during the first quarter of 2023 for Tesla. This is what Reuters reported, citing the Electrek website, which quoted a source familiar with the matter. In addition, the home in Austin, Texas, plans to freeze hiring. The stock exchange, which has been very strict about Tesla for months, welcomed the rumors (albeit with some volatility). CEO Elon Musk already said in June that Tesla would cut its workforce by about 10% in the next three months.

Then the billionaire warned that the Fed’s moves would lead directly to a recession. Of the entities to see, depending on the choices of the central bank. At first, however, he maintained that the companies he leads, and Tesla at the top, would show some resilience in 2023. The situation must have gotten worse. In a Dec. 9 tweet, the controversial businessman and former richest man in the world declared that had the Federal Reserve raised interest rates again, the recession would have been “significantly inflated.”

Meanwhile, the situation got worse. Disputes over his leadership of the social network acquired at the end of October, the collapse of share of the automaker that still holds the highest market value despite experiencing an unprecedented drop for the year (-60% to $439 billion, its lowest in more than two years), and the slashing of price targets. by many analysts and harshly criticized by investors (who have asked Musk to hand over the helm Twitter) They painted the classic picture in dark colors. A novelty for a successful entrepreneur like Musk.

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The return of Covid and fierce competition has also happened in China, forcing the Made in the USA brand to offer discounted prices and insurance policies. After a brilliant November, in which the Shanghai plant set a record, producing more than 100,000 cars, Tesla decided to slow down in December, cutting production by 20%, according to rumors that were denied by local leaders. The suspect, in this case, seems to be low demand. The result: the 2022 targets are now in serious jeopardy. It’s a big load on the title.