FRANKFURT, June 3 (Reuters) – Tesla (TSLA.O) Chief Govt Elon Musk informed prime managers he had a “tremendous unhealthy feeling” in regards to the economic system and that the electrical carmaker wanted to chop workers by about 10%, based on an inside electronic mail seen by Reuters. learn extra
The e-mail, titled “pause all hiring worldwide”, was despatched to Tesla executives on Thursday, underscoring an more and more gloomy international financial outlook with costs hovering and warfare in Ukraine passing its a centesimal day.
The message from Musk got here shortly after Jamie Dimon, chairman and chief government of JPMorgan Chase (JPM.N), mentioned the U.S. economic system confronted challenges akin to a “hurricane”.
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Right here is response to the feedback:
FRANK SCHWOPE, AUTOMOTIVE ANALYST WITH NORDLB:
“I see the statements as a forewarning … in case the economic system takes a flip for the more severe.”
“All automotive producers are going through many issues in the mean time: provide chain points as a consequence of (coronavirus) and the Ukraine warfare, closures in China, provide shortages and so forth.”
“Since many crops haven’t been working at full capability for the reason that (coronavirus) pandemic started, deliberate cost-cutting measures by the automotive firms are fairly comprehensible.”
FIONA CINCOTTA, SENIOR FINANCIAL MARKETS ANALYST, CITY INDEX, LONDON
“Though the Fed thinks a tender touchdown is feasible … there are some warning indicators within the economic system. We all know that development is slowing and inflation stays persistently excessive and we all know that the Fed might want to act aggressively to deliver inflation again down.”
“The query is – will they have the ability to act as aggressively as they should, and clearly Elon Musk would not suppose that they are going to have the ability to, with out placing the economic system right into a deep recession. China slowdown is an added drawback.”
LORENZO CODOGNO, HEAD OF LC MACRO ADVISERS AND FORMER CHIEF ECONOMIST AT THE ITALIAN TREASURY:
“It’s clear that rising costs will weaken consumption. That’s one thing we’ll must face.”
“If the inflation flare-up … begins fading at first of subsequent 12 months … we’ll most likely not see as dramatic an impression on the worldwide economic system as Musk appears to point.”
“And if the shock is non permanent, firms will most likely have an curiosity in … not dropping human capital.”
DANIEL IVES, MANAGING DIRECTOR AND SENIOR TECH ANALYST, WEDBUSH SECURITIES
“Avenue will clearly learn this message negatively at first blush,” Ives wrote on Twitter.
“Elephant within the room now stays the radio silence on Twitter deal. Musk extra adverse on economic system, what’s subsequent in Twitter saga.”
CARSTEN BRZESKI, GLOBAL HEAD OF MACROECONOMIC RESEARCH, ING
“Musk’s unhealthy feeling is shared by many individuals.”
“We’re speaking about stagnation and a worldwide economic system which has to undergo vital structural change, reminiscent of decarbonisation, deglobalisation and adjusting to older societies.”
“However we aren’t speaking about international recession. We anticipate a cooling of the worldwide economic system in direction of the top of the 12 months. The U.S. will cool off, whereas China and Europe aren’t going to rebound.”
“Shedding staff, nevertheless, isn’t the perfect response. We are going to want expert staff greater than ever sooner or later. This might flip into firing after which hiring,” he mentioned.
FRANCOIS SAVARY, CHIEF INVESTMENT OFFICER, PRIME PARTNERS
“On the finish of the day it is simple to make such feedback. Everybody has fears however there is no such thing as a signal but to justify such a adverse outlook.”
“There’s a danger of recession sure … however … it is advisable to see numbers heading in that route and up to now there are none.”
“It’s going to rely quite a bit on what occurs within the labour market. If we now have a big deterioration of U.S. labour markets over the summer season, then … there’s a danger of recession subsequent 12 months.”
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Reporting by John O’Donnell in Frankfurt, Sujata Rao in London, Chavi Mehta and Medha Singh in Bangalore and Elvira Pollina in Milan; Modifying by Mark Potter and Carmel Crimmins
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