Ultimate Resource On Tech Giants And Crypto Companies Cutting Staff, Freezing Hiring or Slashing Costs

Tech giants and crypto companies signal a changing approach to adding workers after years of rapid growth. Ultimate Resource On Tech Giants And Crypto Companies Cutting Staff, Freezing Hiring or Slashing Costs

Updated: 5-13-2022

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After years of adding jobs at a rapid pace, some of America’s fastest-growing companies have signaled in recent weeks that they plan to take a more cautious approach to bringing on new workers.

The shift by these technology giants raises questions about the direction of the overall U.S. job market and comes during a period of volatility in the stock market amid concerns over rising interest rates.

Economists cautioned that, overall, the job market remains robust, with the unemployment rate in April at 3.6%, layoffs at historically low levels and many companies still eager to bring on more workers—if they can even find them.

While employment in the tech sector has grown rapidly and intensified competition for talent across the country, the industry employed about 8.7 million people at the end of 2021, or 5.7% of the overall U.S. workforce, according to CompTIA, an industry trade group.

The slowdown in hiring at some companies suggests that executives are becoming more risk averse and “less prepared to tolerate sort of growth at all costs,” said Julia Pollak, chief economist at the job site ZipRecruiter. “Many of these companies grew so fast in the pandemic; perhaps they overextended a little.”

The shifting hiring landscape in technology has worried some workers, who have expressed concerns on sites such as LinkedIn about rescinded offers or difficulties getting hired. While few large technology companies have announced layoffs, many have said they want to do more to hold down spending.

Facebook parent Meta Platforms Inc. said last week it would sharply slow its hiring after it more than doubled the size of its workforce since 2018.

Twitter CEO Parag Agrawal told staff in a memo Thursday that the company would pause hiring and review the job offers it has made to candidates. Mr. Agrawal said Twitter, which agreed to be acquired by Elon Musk for $44 billion, planned to spend less on contractors and consultants, travel, marketing and other costs.

Uber CEO Dara Khosrowshahi told staff in a note this month that the company will “treat hiring as a privilege” and be more deliberate about when and where it adds new employees. Mr. Khosrowshahi said the company needed to focus on profitability, and that the market and investor sentiment had shifted.

Some companies that grew earlier in the pandemic have run into trouble. Online car dealer Carvana Co. told employees that the company would cut 12% of its workforce, or around 2,500 workers. Fitness-equipment maker Peloton Interactive Inc. said in February that it would cut 2,800 jobs, including about 20% of its corporate positions.

At smaller companies and startups, many entrepreneurs will likely be more prudent about how to spend their company’s cash in an era when it may not be as easy to raise large sums of money quickly, said Vinod Khosla, a prominent venture capitalist.

That may cause some CEOs to think differently about whether to add new positions or expand their teams, he said.

“There is definitely caution among the smart entrepreneurs,” Mr. Khosla said. “Entrepreneurs are pretty smart. When capital is cheap, they waste it,” spending a bit more to gain an advantage over a rival or to increase the size of their market, he said.

By contrast, now, “less money will increase capital efficiency,” Mr. Khosla said.

The shifting focus extends beyond tech. At Scotts Miracle-Gro Co., CEO Jim Hagedorn told investors last week that the company aimed to reduce its overhead expenses by roughly 10% ahead of the next fiscal year.

Mr. Hagedorn said the company would “run skinnier” and be “more mindful of redundant roles, processes and other structural issues that can lead to inefficiencies.”

Among entrepreneurs, many conversations have turned more recently on how to conserve funds, said Maria Colacurcio, chief executive of the technology company Syndio Inc., an analytics platform that helps employers identify and fix pay discrepancies.

“Everyone’s shifting to cash preservation, runway, ‘I don’t want to raise money in this environment,’” Ms. Colacurcio said. “That’s what my peer set, what they’re all talking about.”

But Ms. Colacurcio said she had seen few of her company’s large-employer clients pull back on hiring, and said her own company, which employs around 150, still planned to hire more than 30 people by year-end.

Across the economy, job growth has remained strong in white-collar professions, manufacturing and other industries, ZipRecruiter’s Ms. Pollak said.

“Employers are in no hurry to get rid of workers. On the contrary, they are hungry for new candidates and they are holding on to the workers they have for dear life,” she said.

Still, the moves at large, well-known technology companies were likely to draw attention and have an outsize effect on sentiment about the job market, particularly in an environment when many are anxious about what is next for the economy, she said.

“People are nervous,” she said, “and they’re looking for all signs and signals of what lies ahead.”

Updated: 5-17-2022

The Companies Cutting Staff, Freezing Hiring or Slashing Costs

Even amid a tight labor market and low unemployment, some public companies and startups are turning cautious amid falling markets and economic concerns.

Companies which saw substantial growth during the Covid-19 pandemic are starting to take a more cautious approach toward hiring and spending.

From Peloton Interactive Inc. and Meta Platforms Inc. to Twitter Inc., Uber Technologies Inc. and others, corporate belt tightening comes as the Federal Reserve is raising interest rates, global stock markets have fallen and concerns of an economic slowdown are mounting.

Still, last week’s jobs report showed the labor market continued growing rapidly. And many businesses have struggled to fill jobs throughout the pandemic.

Here’s a look at the companies that are laying people off, changing their hiring practices or cutting spending.

Coinbase

Coinbase Global Inc. says it is slowing hiring and re-evaluating its head count following recent quarterly results that showed the largest U.S. cryptocurrency exchange lost hundreds of millions of dollars and was bleeding users.

“Heading into this year, we planned to triple the size of the company,” Emilie Choi, president and chief operating officer at Coinbase, told staff in a note posted on the company’s blog. “Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals.”

Coinbase shares have fallen by roughly 75% this year and trade well below last year’s initial public offering price. The company has suffered amid a sharp downturn in the crypto market, where more than $1 trillion in value has vanished within the past six months.

“We know this is a confusing time and that market downturns can feel scary,” Ms. Choi said, noting that the company plans for various market scenarios. “We are starting to put some of those plans into practice,” she said.

Twitter

Twitter is imposing a hiring freeze and might renege on some job offers, Chief Executive Parag Agrawal said in an internal memo. The social-media company isn’t planning companywide layoffs, he said. “Please continue to treat Twitter’s resources as you would your own, and manage tightly to your budgets, prioritizing what matters most,” Mr. Agrawal said in the memo.

The hiring freeze comes shortly after Twitter agreed to sell itself to Elon Musk for $44 billion. Mr. Musk said on Friday that his takeover deal was on hold, though he later said he was “still committed” to the acquisition.

Carvana

Carvana Co. is cutting around 2,500 staffers, or 12% of its workforce after finalizing an expansion deal. The online car dealer grew substantially during the pandemic and paid for it through low-cost borrowing.

“It has always been the right move to start building for growth well ahead of when we expect it to show up,” Carvana CEO Ernie Garcia III wrote in an email to employees.

“This strategy worked for us every year until this one.” A spokeswoman told The Wall Street Journal that the adjusted head count will offer a better balance between sales volumes and staffing levels for the company.

Peloton

Peloton recently logged its worst quarterly loss as a public company and raised $750 million in loans to help bolster its balance sheet. In February, the at-home fitness company said it would cut 2,800 corporate jobs as it suffers from weaker-than-expected demand for its equipment. Instructors were excluded from the layoffs.

Netflix

Netflix Inc. said it is cutting about 150 employees in a new round of layoffs as the streaming company grapples with slowing revenue growth and a shrinking subscriber base. A company spokeswoman said most of the employees being laid off are based in the U.S., and that the layoffs were based primarily on business needs rather than individual performance.

The cuts come after the company laid off about 25 people in its marketing department in April. Those cuts included some employees for the company’s website called Tudum, which produces content related to Netflix’s different shows and movies.

Robinhood

Robinhood Markets Inc. said late last month it was laying off 9% of its full-time staffers. The trading platform, which saw rapid growth during the Covid-19 pandemic as individuals flocked to trading, said it is cutting back on duplicate roles it added during that period of growth.

Robinhood’s head count more than quintupled during the pandemic to 3,800 people, according to Chief Executive Vlad Tenev.

“This rapid head count growth has led to some duplicate roles and job functions, and more layers and complexity than are optimal,” Mr. Tenev said.

Meta Platforms

Facebook parent Meta Platforms announced earlier this month a slowdown in hiring. “We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly,” a Meta spokesperson said in a statement. “However, we will continue to grow our workforce to ensure we focus on long term impact.”

Uber

Ride-hailing company Uber plans to scale back on its hiring and cut marketing costs. “We will treat hiring as a privilege and be deliberate about when and where we add head count,” Chief Executive Dara Khosrowshahi told staff in an email earlier this month. “We will be even more hard-core about costs across the board.”.

Better.com

Online mortgage lender Better.com has had three rounds of layoffs since December, including one where it fired 900 employees over a Zoom call. It also recently offered staffers voluntary buyouts.

While mortgage lenders benefited from substantial refinancing and home buying earlier in the Covid-19 pandemic, they now face an environment where fewer people are expected to refinance and mortgage rates are climbing, which could curb home purchases.

“This is not the measure we wanted to take,” Richard Benson-Armer, Better.com’s chief people, performance and culture officer, told employees in a memo last month. “But, this is both prudent and necessary for the health of our business.”

Scotts Miracle-Gro

Scotts Miracle-Gro Co. Chief Executive James Hagedorn said earlier this month that the company is targeting cutting its overhead structure by around 10% before the start of the next fiscal year. He said the company aims to cut staff in its Hawthorne business and that it will “run skinnier and be more mindful of redundant roles” in its U.S. consumer businesses and corporate call centers.
Wells Fargo

Wells Fargo & Co. has laid off people in its home lending department, a spokeswoman said, without disclosing the specific number of people affected. “The home lending displacements are the result of cyclical changes in the broader home lending environment,” she said.

Updated: 5-24-2022

Lyft To Pause Some Hiring And Trim Budgets, Citing Economic Slowdown

President John Zimmer announced the measures to staff Tuesday.

Lyft Inc. will slow hiring, reduce the budgets of some of its departments and grant new stock options to some employees to make up for its eroding share price, joining rival Uber Technologies Inc. in outlining cuts as investor optimism cools on tech stocks.

President John Zimmer announced the measures Tuesday in a memo to staff.

“It’s clear from our discussions with other business leaders that every company is taking a hard look at how they respond to concerns about an economic slowdown and the dramatic change in investor sentiment,” Mr. Zimmer wrote in an internal memo viewed by The Wall Street Journal.

“Given the slower than expected recovery and need to accelerate leverage in the business, we’ve made the difficult but important decision to significantly slow hiring in the US,” he said.

That includes the company giving priority to fewer initiatives, not filling many of the current open roles and focusing hiring on roles deemed critical, such as those that support its core rides business, Mr. Zimmer said. He said there are no layoffs planned.

Lyft’s board met on Friday to discuss the cuts, said a person familiar with the meeting. Lyft began signaling to some employees recently that there would be a hiring slowdown and cutting of budgets, another person familiar said.

Lyft shares have lost more than 60% since the start of the year, more than double the decline of the Nasdaq Composite Index. After declining more than 15% Tuesday, Lyft shares were up less than 1.5% in after-hours trading after the Journal reported about the plans.

Tech companies that powered the U.S. economy during the pandemic are suffering through a punishing stretch. Concerns about rising interest rates and the reversal of some pandemic trends that bolstered tech revenues have hit the share prices of Peloton Interactive Inc., Netflix Inc., Amazon.com Inc. and others.

Last month Amazon reported the slowest quarterly revenue growth in about two decades. Netflix lost subscribers during its first quarter for the first time in more than a decade and signaled that losses are set to continue. Apple Inc. cautioned that the resurgence of Covid-19 in China could hinder sales.

The shares of Snap Inc. tumbled 43% Tuesday after it said in a Monday filing that revenue and adjusted pretax earnings for the second quarter will come in below the range the company projected barely a month ago due to weak advertising revenues. Other tech stocks that rely on digital advertising, including Google parent Alphabet Inc. and Facebook parent Meta Platforms Inc., also fell.

After years of adding jobs at a rapid pace, some tech companies have been broadcasting that they think it is time to take a more cautious approach. The pullback by tech giants raises questions about the direction of the overall U.S. job market and economy.

Meta, Peloton and Uber are among the tech companies that have announced they will slow hiring or re-evaluate their head count in recent weeks.

Among the other issues cooling the long-hot sector: inflation, labor shortages and supply-chain issues.

Uber and Lyft are struggling with a year-long driver shortage that has pushed fares to record highs. The elevated fares have partly resulted in fewer Lyft riders and fewer Uber trips compared with before the health crisis, though both companies’ first-quarter revenue outpaced prepandemic levels on the back of higher prices.

Lyft’s first-quarter results were overshadowed by a weaker-than-expected earnings outlook as the company said it would need to spend more money to incentivize drivers to return. Its stock tumbled more than 35% after the announcement, marking the biggest percentage drop in a single day since the company went public in 2019.

Earlier this month, Uber said it would cut spending on marketing and scale back on hiring as it focuses on turning a profit.

Both companies spent big for years to gain customers and market share. But their 2019 public offerings disappointed, with Wall Street increasingly wanting to see money-losing companies turn a profit.

“As we’ve seen and discussed, public market investors have continued to sharply shift their focus onto a potential recession and a company’s ability to deliver near-term profits,” Mr. Zimmer wrote in Tuesday’s memo.

He went on to write that “our near-term action plan will be focused on accelerating profits—whether we like it or not, that’s the ticket of entry in today’s market.”

Uber and Lyft have trimmed their losses, unloading costly divisions such as their self-driving units and cutting staff during the health crisis. Both companies turned a quarterly adjusted profit before certain expenses like interest, taxes and depreciation last year.

Uber said it expects to be cash-flow positive on a full-year basis this year. If it meets that goal, it would mark the first time the underlying operations of the ride-share and food-delivery giant generate more money than it spends.

Updated: 5-26-2022

PayPal Begins Cutting Staff as Its Push to Reduce Costs Ramps Up

* Payments Firm Laid Off Dozens Of Staff From Arizona To Chicago
* Spending On Paypal’s Platforms Lost Steam As Pandemic Eased

PayPal Holdings Inc. began laying off staffers who worked in risk management and operations this week as the firm seeks to shore up profits after growth in spending on its platform stagnated in recent quarters.

The company laid off dozens of staffers who worked in Chicago, Omaha, Nebraska and Chandler, Arizona, according to people familiar with the matter, who asked not to be identified discussing private information. PayPal this month also announced plans to permanently lay off more than 80 people in its headquarters in San Jose, California, according to filings with that state.

“PayPal is constantly evaluating how we work to ensure we are prepared to meet the needs of our customers and operate with the best structure and processes to support our strategic business priorities as we continue to grow and evolve,” PayPal said in a statement.

Spending on PayPal’s platforms climbed just 15% in the first quarter to $323 billion, the smallest increase in at least five years, when supply chain disruptions hindered e-commerce purchases and more consumers returned to in-store shopping as the pandemic eased. The firm’s former parent company EBay Inc. has also been rapidly moving payments away from PayPal’s platform.

PayPal’s headcount has climbed in recent years and the firm ended last year with 30,900 employees, a 33% increased from pre-pandemic levels.

The company said last month it was working to improve operating leverage — or the ability to grow revenue faster than expenses. Chief Executive Officer Dan Schulman said the company had started to simplify its operating model before the pandemic, but the explosion in volumes on its platform in the early days of the outbreak forced the company to put that work on hold.

“We are now coming back to this work with renewed focus, energy and purpose,” Schulman vowed at that time.

PayPal warned in a regulatory filing that it incurred $20 million in costs tied to its restructuring in the first three months of the year after it initiated a “strategic reduction of the existing global workforce.” Most of the costs were linked to severance and other employee benefits, PayPal said.

The company now expects to incur an additional $100 million in restructuring charges this year, though the job cuts will ultimately help the firm save about $260 million a year in employee-related costs, PayPal said.

“We are continuing to review our facility needs due to our new work models,” PayPal said in the filing. “The strategic actions and cash payments associated with this plan are expected to be substantially completed by the fourth quarter of 2022.”

Updated: 6-2-2022

Small US Companies Lose Almost 300,000 Jobs Since February

* Some Rate-Sensitive Sectors See Jump In Job-Cut Announcements
* Workers Seek Out More Competitive Pay, Perks At Bigger Firms

Small companies have shed jobs in three of the last four months, with some indication that this vital pillar of the US economy is feeling the pinch of higher borrowing costs.

Firms with fewer than 50 employees have lost almost 300,000 jobs since February, data from the ADP Research Institute showed on Thursday. Some 91,000 of the losses came in May.

Some of that may have come from a competition for workers to fill the record levels of job openings seen nationwide in recent months, especially as many jump to bigger companies that can offer more competitive pay and benefits. But other data suggest that the Federal Reserve’s monetary-tightening campaign may also be having an impact.

Construction and other sectors that tend to be more sensitive to changes in interest rates saw more job-cut announcements in May than in the previous four months combined, Challenger, Gray & Christmas, Inc. — an outplacement and business-coaching firm — reported Thursday.

Two-thirds of job losses since February have been at firms with fewer than 20 employees, according to ADP. That category has also seen the longest streak of monthly declines in payrolls since before the onset of Covid-19. More broadly, US companies of all sizes in May added the fewest jobs since the pandemic recovery began.

“The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late,” said Nela Richardson, ADP’s chief economist.

ADP data showed that construction jobs contracted in May for the first time in 15 months. That’s amid evidence that higher mortgage rates are beginning to impact the housing market. Both housing starts and permits fell in April, according to the Census Bureau.

The ADP report is not always a reliable predictor of the far-more-widely watched monthly employment report from the government’s Bureau of Labor Statistics, which is due on Friday.

Middle Eastern Crypto Exchange Rain Lays Off Dozens of Employees

The move follows news of workforce reductions at a number of exchanges in the U.S. and worldwide.

Coinbase-backed Rain Financial, a large crypto exchange based in Bahrain, has laid off dozens of employees, according to Bloomberg, citing sources with direct knowledge of the move.

* The layoffs were made as cryptocurrency prices have suffered an extended downturn and international markets have also suffered, according to Bloomberg.

* “We have had to make tough decisions to be able to navigate through this period of uncertainty and we can confirm we have downsized our Rain workforce,” Rain CEO Joseph Dallago said in a statement provided to Bloomberg. A Rain spokesperson confirmed to CoinDesk that the statement was made by Dallago, but provided no additional details.

* Rain has between 251 and 500 employees, according to Crunchbase, while LinkedIn puts the number at 501-1,000.

* The move follows news on Thursday from crypto exchange and custodian Gemini that it is laying off about about 10% of its workers amid “turbulent market conditions.” And last week, Argentinian exchange Buenbit announced it was cutting 45% of its staff because of the tech downturn, while top Latin American exchange Bitso said it was laying off 80 employees.

* Rain Financial raised $6 million in January in a round of financing led by Middle Eastern venture capital firm MEVP Capital with Coinbase as one of the participants. It was the first cryptocurrency exchange to receive a crypto-asset service provider license from the Central Bank of Bahrain.

Coinbase Announces Cost-Cutting Measures As Crypto Firms Face Bear Market

The Coinbase news follows an announcement of layoffs at fellow exchange Gemini earlier today.

Coinbase (COIN) is the latest crypto firm to announce cutbacks.

In a blog post written by Chief People Officer L.J. Brock, Coinbase said Thursday it “will extend our hiring pause for both new and backfill roles for the foreseeable future and rescind a number of accepted offers.”

The cutbacks come “in response to the current market conditions and ongoing business prioritization efforts,” he wrote.

The cost-cutting measures will see Coinbase rescind “a number of accepted offers” to prospects yet to start, and extend the two-week hiring pause “for as long as this macro environment requires.”

The hiring freeze is a continuation of a plan announced last month. The latest announcement comes after fellow exchange Gemini announced Thursday it was laying off 10% of its staff, or roughly 100 people.

Crypto exchanges globally have felt the market crunch. In recent weeks, Latin America’s top exchange Bitso fired 80 employees, Argentina’s Beunbit nearly halved its staff and Middle Eastern exchange Rain reportedly laid off “dozens.”

“Adapting quickly and acting now will help us to successfully navigate this macro environment and emerge even stronger, enabling further healthy growth and innovation,” wrote Coinbase’s Brock.

Major Crypto Firms Reportedly Cut Up To 10% Of Staff Amid Bear Market

Previous crypto bear markets triggered much bigger layoffs, with some firms like ConsenSys reportedly firing up to 60% of its workforce in 2018.

Gemini, a cryptocurrency trading platform founded by brothers Cameron and Tyler Winklevoss, is the latest industry firm to lay off a significant part of its staff due to unfavorable market conditions.

Winklevoss’ crypto business Gemini Trust reportedly cut 10% of its employees amid the ongoing bear crypto market, the founders wrote in a notice to employees on June 2, as Bloomberg reported.

As part of its first major headcount cut, Gemini will refocus on products that are “critical” to the firm’s mission, the brothers said, adding that “turbulent market conditions” are “likely to persist for some time.” The notice reportedly reads:

“This is where we are now, in the contraction phase that is settling into a period of stasis — what our industry refers to as “crypto winter. […] This has all been further compounded by the current macroeconomic and geopolitical turmoil. We are not alone.”

The new report comes after a number of major industry companies fired some employees or put new hires on hold. In mid-May, the Coinbase exchange officially announced that it would slow down hiring and reassess its headcount in order to ensure it continues operating as planned.

Previously, the major crypto-friendly trading platform Robinhood fired 9% of its workforce. The layoffs came amid Robinhood’s HOOD stock touching all-time lows as part of a longer-term bear market on crypto markets.

The latest crypto industry layoffs are by no means new to the industry as major crypto markets like Bitcoin (BTC) have been historically moving in cycles, with major bear markets preceding bigger gains.

Amid a massive bear market of crypto in 2018, some industry firms like ConsenSys reportedly fired up to 60% of their workforce, announcing plans to hire 600 employees afterward.

According to some sources, the current conditions of the crypto job market do not look too gloomy though. A spokesperson for the FTX crypto exchange told Cointelegraph that the firm has not cut and does not plan to lay off any of its current 175 employees at the global exchange or 75 employees at the FTX US.

According to the crypto hiring website by the Bitcoin influencer Anthony Pompliano, executives in the crypto and blockchain industry are still looking to hire people, with the PompCryptoJobs website listing about 600 open positions at the time of writing.

The major global crypto exchange Binance is looking to hire nearly 1,000 employees, according to its official job openings website.

Gemini did not immediately respond to Cointelegraph’s request for comment.

Updated: 6-3-2022

Tesla Pauses Hiring As Musk Aims For 10% Staff Cut, Reuters Says

* With Some 99,290 Staff, 10% Could Equal Almost 10,000 Jobs
* US Economic Growth Has Downshifted, Fed Reserve Said This Week

Tesla Inc. Chief Executive Officer Elon Musk said the electric carmaker needs to cut staff by around 10%, noting he had a “super bad feeling” about the economy, according to an internal email seen by Reuters.

The email, titled “pause all hiring worldwide,” was sent to Tesla executives on Thursday, according to the report.

Shares of Tesla fell 6.7% to $722.85 at 9:44 a.m. in New York, weighing on the broader US market. Representatives from the automaker didn’t immediately respond to requests for comment Friday.

Tesla had not been signaling a slowdown, with two newly opened vehicle assembly plants, record global sales volume in its most recent quarter and a prediction from Musk for “substantially higher” growth later this year.

“Headline is a surprise to us given significant growth path/expansion ahead for Tesla,” Dan Levy, an analyst at Credit Suisse with an “outperform” rating on the stock, said in a research note Friday.

But coronavirus-related restrictions in China have crimped output at the company’s Shanghai plant, leading some analysts to question whether Tesla can meet its goal of 50% annual growth in deliveries. Cowen on Friday cut its estimate for the carmaker’s global deliveries to 1.28 million, down from a previous estimate of 1.35 million.

The report comes at a tumultuous time for Musk and the carmaker he made an EV pioneer. Tesla’s stock has slumped 22% since the billionaire struck a shock deal to acquire Twitter Inc. that now appears to have stalled.

Anxiety about the global economy and the impact of China’s Covid-19 lockdown in Shanghai, where Tesla has a factory, have also weighed on the company, which has weathered worldwide supply shortages for components like chips better than most.

Analysts on Thursday said slumping new-car sales in the US were stoking fears of a potential recession.

Musk also joined the heated debate around return to office this week, urging staff at Tesla to get back to their desks, or find work elsewhere.

“The more senior you are, the more visible must be your presence,” Musk wrote, adding that employees were “required to spend a minimum of 40 hours in the office per week.”

“That is why I lived in the factory so much — so that those on the line could see me working alongside them,” he said. “If I had not done that, Tesla would long ago have gone bankrupt.”

Tesla, which has EV factories in the US, China and Berlin, employs around 99,290 staff worldwide, so culling 10% of jobs could equate to losses approaching 10,000 people.

The Austin, Texas-headquartered company cut its workforce by 7% — or more than 3,000 jobs — in early 2019, warning that the “road ahead is very difficult” in making electric cars more affordable for the mass market.

However Tesla increased worldwide employee count by 40% last year, its biggest expansion since 2014, when the company had just over 10,000 workers.

Record Production

The EV maker produced 930,422 cars last year, and delivered 936,222, a record even despite a global chip shortage that’s been ongoing for more than 12 months and Covid-related supply chain snarls. In China, Tesla’s second most important market after the US, the company’s Shanghai factory was shut for three weeks in April. It generally pumps out about 2,100 cars a day.

Tesla shares slumped as much as 2.7% in US pre-market trading. US stock-index futures also turned lower after the Reuters report, with contracts on the Nasdaq 100 sliding 0.5%.

Economic growth in the US looks to have downshifted in recent weeks in the face of headwinds that include rising interest rates and inflation, the Federal Reserve said earlier this week.

Price gains may be moderating in parts of the country as households and businesses navigate everything from higher rates to the Russian invasion of Ukraine and ongoing disruptions from Covid infections.

According to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, investors should prepare for an economic “hurricane” as the economy struggles against an unprecedented combination of challenges. “We don’t know if it’s a minor one or Superstorm Sandy. You better brace yourself,” Dimon said at a conference Wednesday.

In China, meanwhile, the government is pulling out all stops to spur economic growth as Covid outbreaks and lockdowns crush consumer confidence. Part of that plan involves getting consumers to buy more cars, with authorities last month outlining sales tax reductions for passenger cars that will amount to around 60 billion yuan ($9 billion).

China Challenges

Tesla has been going to extraordinary lengths to get production up and running in China, isolating thousands of workers in disused factories and an old military camp to ensure they’re Covid free.

The more than 10,000 workers living in Tesla’s Shanghai “factory bubble” have been told to be prepared to stay in the system until June 10, people familiar with the matter said.

In recent weeks, Musk has praised Tesla China employees for “burning the 3am oil” while saying that Americans are “trying to avoid going to work at all.”

A wish to cut jobs at Tesla, just one of several companies Musk heads along with Space Exploration Technologies Corp., or SpaceX, comes as his attempt to take over Twitter looks to have hit a snag.

Musk, the world’s richest man with a net worth of about $227.5 billion, has repeatedly cast doubt over whether the acquisition will be completed, even though the parties had agreed to do so this year.

Musk became Twitter’s largest individual shareholder in early April with more than 9% of the social media platform. On April 25, Twitter and Musk said they’d reached an agreement for the billionaire to acquire the company and take it private.

Shares in Tesla fell 27% this year through Thursday after posting gains of 50% and 743% in 2021 and 2020 respectively.

Audio App Clubhouse Lays Off Staff As Strategy Shifts

The company moves away from categories like news, sports.

Clubhouse, the social audio app that became a big hit during the early days of the pandemic, laid off multiple employees this week, according to people familiar with the reductions. The layoffs are part of a broader restructuring and rethinking of the audio app’s strategy.

Some employees chose to leave on their own as the company cuts back some of the programming areas it had focused on before, such as sports, news and international, according to the people, who asked not to be identified because the discussions were private.

“A handful of roles were eliminated as part of streamlining our team, and a few individuals decided to pursue new opportunities,” a spokesperson for Clubhouse said in an emailed statement. “We are continuing to recruit for many roles across engineering, product and design.”

Three women tweeted their departures from the company on June 1st, including Nina Gregory, a National Public Radio alum who led news partnerships, Anu Atluru, head of community, and Aarthi Ramamurthy, head of international. Sean Brown, head of sports partnerships, announced he was leaving last month. Stephanie Simon, who was in charge of brand evangelism and development, left in late April.

“Clubhouse wouldn’t be where it is today without these talented people,” the spokesperson said. “We’re immensely grateful for everything they’ve done and know they’ll do great things in the future.”

The app skyrocketed to a $4 billion valuation after its 2020 launch as people on lockdown around the world turned to the service to listen and chat with others online. The company has continued to launch new features, like dark mode, which makes the app easier on the eyes. It’s also tested in-app games. Chief Executive Officer Paul Davison last shared usage stats in November 2021. He told CNBC the number of rooms created each day had increased from 300,00 last summer to around 700,000 in the fall.

The app inspired competing products at other tech companies, however, and prominent content creators have left the platform. The Lullaby Club, which various publications highlighted as early success, now does its show on Amazon’s new live audio app Amp.