Elon Musk, Founder and CEO of electric vehicle (EV) maker Tesla (TSLA), is sending alarming signals with his latest moves revolving around Tesla’s workforce. At the time of writing, TSLA stock was down 4.3% during pre-market trading.
First, Musk insisted that employees stop remote work entirely and work for a minimum of 40 hours per week at the office or factory, or leave Tesla. According to an email seen by Reuters, he has directed to “pause all hiring worldwide” since he has a “super bad feeling” about the economy and needs to cut about 10% of the workforce at Tesla.
Besides this, Musk also notified through a tweet that the “Tesla AI Day pushed to Sept 30, as we may have an Optimus prototype working by then.”
The carmaker has also further delayed EV deliveries, which could be a result of the combined effect of the chip shortages and Shanghai Gigafactory lockdowns, as well as surging demand for its EVs.
Musk’s moves are already drawing flak at the newly started German Gigafactory, where employees are protesting against the “no remote work” motion. With the latest email, employees are sure to fear job loss. Musk is probably worried about the onset of a recession just as experts around the globe are projecting.
Economies worldwide are facing the impact of record high inflation rates. Consumer spending has slowed down; interest rates are rising; and companies are lowering their outlook for the near term. Microsoft (MSFT) is the latest one to lower its revenue and profit forecast, citing an unfavorable exchange rate impact.
Stock Investors
On a positive note, TipRanks’ Stock Investors tool shows that investor sentiment is currently Positive on Tesla, with 2.5% of portfolios tracked by TipRanks increasing their exposure to TSLA stock over the past 30 days.
Hedge Funds
Nonetheless, TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Tesla is currently Very Negative, as 31 hedge funds decreased their cumulative holdings of TSLA stock by 652,600 shares in the last quarter.
Target Price
The Wall Street community is also cautiously optimistic about TSLA stock, with a Moderate Buy consensus rating based on 14 Buys, 10 Holds, and six Sells. The average Tesla price target of $923.66 implies 19.2% upside potential to current levels. Meanwhile, year to date, the stock has lost 35.4%.
Conclusion
The fears of a recession are drawing closer, with all macroeconomic factors hinting at the same. Even investors are sending mixed signals for TSLA stock. It is essential to take precautionary steps now rather than take remedial measures later. In the meantime, Musk might also be gearing up with stringent directives to face the worst.
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