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Tesla to cut salaried workforce by 10% over next 3 months: Elon Musk

DUBAI (REUTERS, BLOOMBERG) - Electric carmaker Tesla will reduce its salaried workforce by roughly 10 per cent over the next three months, chief executive Elon Musk said on Tuesday (June 21).

The cuts would amount to about a 3.5 per cent reduction in total headcount at the company, Mr Musk said at the Qatar Economic Forum organised by Bloomberg.

"We grew very fast on the salaried side," Mr Musk said in an interview with Bloomberg News editor-in-chief John Micklethwait at forum. "A year from now, I think our headcount will be higher" both in salaried and hourly workers, but for now the headcount reduction will be 3 per cent to 3.5 per cent, he said.

Mr Musk had emailed Tesla executives on June 2 to say he had a "super bad feeling" about the economy and the the company needs to cut about 10 per cent of jobs.

Tesla, now headquartered in Austin, has grown to about 100,000 employees globally and has hired rapidly in recent months. The job cuts, which have impacted everyone from human resources representatives to software engineers, caught many by surprise.

Mr Musk also said supply constraints are the biggest brake on Tesla’s growth, rather than competition from rival automakers.

“Our constraints are much more in raw materials and being able to scale up production,” he said in the interview.

“As anyone knows who has tried to order a Tesla, the demand for our cars is extremely high and the wait list is long,” he said. “This is not intentional and we’re increasing production capacity as fast as humanly possible.”

Mr Musk earlier this month said the EV pioneer has had a “very tough quarter” as it struggles with supply-chain snags and urged workers to help get production back on track.

“This has been a very tough quarter, primarily due to supply chain and production challenges in China,” Mr Musk said in an email to employees. “So we need to rally hard to recover!”

Tesla’s Shanghai factory, capable of churning out around 2,100 cars a day in normal times, was shuttered for three weeks through mid-April during Shanghai’s months-long lockdown. The automaker went to extraordinary lengths to get it up and running again, getting staff to live and work onsite in a so-called closed loop system.

Asked whether he saw competition in EVs coming from established global auto giants like Volkswagen and Ford Motor, which are pouring tens of billions of dollars into electrifying their fleets, or Chinese upstarts like Nio and Xpeng, Mr Musk praised the Chinese firms.

“I am very impressed with the car companies in China in general,” he said. “I think they are extremely competitive, hard working and smart.”