Musk's grim assessment of a future recession and its repercussions for manufacturers is the most forthright and high-profile prediction of its sort in the industry.

Elon Musk, CEO of Tesla, has a "very awful feeling" about the economy and wants to reduce approximately 10 percent of positions at the electric automaker, according to an email reviewed by a news agency.

The letter was sent two days after the richest man in the world instructed staff to return to work or leave the firm. According to Tesla's 2021 annual SEC filing, the firm and its subsidiaries employ over 100,000 individuals by the end of 2021.

Musk's grim assessment of a future recession and its repercussions for manufacturers is the most forthright and high-profile prediction of its sort in the industry. While the likelihood of a recession has increased, demand for Tesla cars and other electric vehicles has remained robust, and many of the typical markers of a recession, such as rising dealer inventories in the United States, have not materialized.

However, Tesla has had difficulty restarting production at its Shanghai facility after COVID-19 lockdowns necessitated costly interruptions.

Musk's pessimistic attitude is consistent with recent statements made by leaders such as JPMorgan Chase & Co. CEO Jamie Dimon and Goldman Sachs President John Waldron.

Inflation in the United States is hanging at 40-year highs, resulting in a rise in the cost of living for Americans, while the Federal Reserve has the challenging goal of reducing demand sufficiently to control inflation without triggering a recession.

Prior to Musk's warning, which came in the form of an email labeled "stop all hiring globally," Tesla had about 5,000 job posts on LinkedIn, ranging from sales in Tokyo to engineers at its new Berlin gigafactory to deep learning scientists in Palo Alto.

In Germany, Musk's demand that employees return to the workplace has already been met with resistance.

"Everyone at Tesla is required to spend a minimum of 40 hours in the office per week," Musk wrote in his Tuesday email. "If you don't show up, we will assume you have resigned."

Musk also had a Twitter dispute on Thursday with Australia tech millionaire and Atlassian Plc co-founder Scott Farquhar, who mocked the instruction in a series of tweets as "like something out of the 1950s."

In response to Farquhar's post encouraging Tesla employees to investigate its remote work opportunities, Musk tweeted: "recessions serve a vital economic cleansing function."

Musk stated, in late May, in response to a Twitter user's question as to whether the economy was entering a recession, "Yes, but this is a positive development. Too long has it been pouring money on idiots. Some bankruptcies must occur."

Another expert commented that there's a chance that this is a disguised layoff, meaning they're able to let individuals go through attrition or without officially laying them off."

Elon Musk is aware that a certain number of employees would not return," which he added would be less expensive because no severance pay would be required.