Pressure on Musk Mounts as Tesla Shares Slide, Prompting Layoff Talk

Musk also says he'll eventually step down as Twitter CEO

Elon Musks's twitter profile

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Pressure is mounting on Elon Musk as Tesla Inc. (TSLA)'s tanking stock price prompts talk of layoffs, while the tycoon says he'll eventually step down as Twitter's CEO.

With Tesla shares down more than 60% this year, the company told workers that it has frozen hiring and to expect layoffs early next year, EV publication Elektrek reported. The report comes six months after Musk called for a "pause" on new hires and said the company should cut a tenth of its workforce.

Among the critics is longtime Tesla bull Ross Gerber, who is seeking a seat on the company's board. "Elon has now erased $600 bil of tesla wealth and still nothing from the Tesla BOD," Gerber tweeted on Dec. 16. "It’s wholly unacceptable." Four days later, he added, "Time for a shake up."

The speculation comes as Musk the Twitter owner has apparently had enough of Musk the Twitter CEO—just like many users of the site and the disgruntled Tesla shareholders who say he's spent far too much time and money on the social media network. Musk, now the world's second-richest person after Tesla's protracted decline, said late Wednesday he would abide by the results of a Twitter poll he'd posted Sunday asking users if he should step down.

"I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software & servers teams," the billionaire tweeted. More than 57% of the poll's 17.5 million votes favored Musk's resignation.

Key Takeaways

  • Elon Musk has said he will step down as Twitter CEO once he finds a successor.
  • The search for a new CEO was reportedly underway before Musk posted a Twitter poll asking users if he should give up the job.
  • More than 57% of the votes in the twitter poll called for Musk's resignation.
  • Musk has become embroiled in numerous controversies since acquiring the social network, while many of Twitter's former advertisers have stopped buying ads.
  • Musk has faced criticism that his preoccupation with Twitter has contributed to the decline in the share price of Tesla, where he also serves as CEO.

Musk has embarked on a search for his successor as Twitter CEO, though the process "could be drawn out and take time to yield results," a confidential source told Bloomberg. The search began before Musk posted the related poll, according to CNBC. Musk replied to CNBC's story on Twitter with two "rolling on the floor laughing" emojis, before confirming he would step down hours later.

Once Musk finds a candidate he actually wants, he'll probably have to offer a better deal than the one he floated when AI researcher and podcaster Lex Fridman offered to take the position without a salary. "You must like pain a lot," Musk responded. "One catch: you have to invest your life savings in Twitter and it has been in the fast lane to bankruptcy since May. Still want the job?"

Since buying Twitter on Oct. 27, Musk has laid off more than half of the company's employees, restored the account of former President Donald Trump and others found to have violated the network's terms of service before the acquisition, and promulgated controversial Twitter policies only to change or revoke them soon after. On Tuesday, Musk said cost-cutting measures implemented since he took over Twitter has averted a $3 billion annual cash flow deficit next year.

Some Tesla shareholders have criticized Musk for neglecting his job as the CEO of the automaker on the distraction of simultaneously running Twitter. Shedding the high profile job as a self-appointed "Chief Twit" would allow Musk to focus more on Tesla, which faces growing competition and economic headwinds as a leading manufacturer of electric vehicles.

Of course, Musk has a history of saying things that turn out not to be true or are subject to change:

  • He tweeted that funding for a possible deal to take Tesla private had been secured when no such funding was in place, incurring sanction by the Securities and Exchange Commission.
  • In April, he agreed to buy Twitter for $44 billion. In July, he tried to cancel the deal, and in October he decided to stop trying to stop it, buying Twitter for $44 billion.
  • On Tesla's Oct. 19 earnings conference call Musk said he "sees a path" to Tesla being worth more than Apple (AAPL) and Saudi Aramco put together. Tesla's share price has dropped 37% since then and is down more than 60% in 2022.
  • Sale of Tesla shares by Musk, Tesla's CEO and top shareholder, have weighed on the stock alongside economic and business factors, after Musk tweeted in August he was done selling.
  • On Nov. 6 Musk tweeted that "my commitment to free speech extends even to not banning the account following my plane, even though that is a direct personal safety risk." On Dec. 14 Twitter suspended the Elon Jet account tracking Musk's flights, then other flight tracking accounts, and eventually those of journalists covering Musk and Twitter. Twitter reinstated several journalists' accounts days later.
  • Musk claimed the ban of real-time flight tracking accounts was motivated by the use of that information by a stalker who blocked a car carrying one of his children. But according to police in South Pasadena, California, a member of Musk's security team is a suspect, not the victim, in an alleged "vehicle assault" during the incident.
  • On Sunday, Twitter instituted a policy banning users from posting links or displaying their account names from several rival social networks, including Facebook, Instagram, Mastodon, and Truth Social. After an uproar from users, Musk apologized and promised to poll users on major policy changes in the future. Twitter has since deleted the tweets and posts outlining the short-lived rule.
Article Sources
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  2. "War of Words Between Elon Musk and a Tesla Investor."

  3. Elon Musk on Twitter. "I Will Resign...."

  4. Elon Musk on Twitter. "Should I Step Down...."

  5. Bloomberg. "Musk Will Resign as Twitter CEO and Focus on Engineering."

  6. CNBC. "Elon Musk Actively Searching for a New Twitter CEO, Sources Say."

  7. Elon Musk on Twitter. "Tweet."

  8. Elon Musk on Twitter. "You Must Like Pain...."

  9. Bloomberg. "Musk Says Cost-Cutting Averted $3 Billion Twitter Shortfall."

  10. Ross Gerber on Twitter. "Tesla Stock Price Now...."

  11. CNBC. "Elon Musk Tries to Explain Why Tesla Shares Are Tanking."

  12. Elon Musk on Twitter. "Am Considering Taking Tesla...."

  13. U.S. Securities and Exchange Commission. "Elon Musk Settles SEC Fraud Charges; Tesla Charged With and Resolves Securities Law Charge."

  14. Reuters. "U.S. Judge Says Musk Recklessly Tweeted That 'Funding Secured' for Taking Tesla Private."

  15. Elon Musk on Twitter. "Yesss!!!"

  16. Elon Musk on Twitter. "Yes...."

  17. CNBC. "Elon Musk Sells at Least $3.95 Billion Worth of Tesla Shares After Twitter Deal."

  18. CNBC. "Elon Musk Sells Another Huge Chunk of Tesla Shares."

  19. Elon Musk on Twitter. "My Commitment to Free Speech...."

  20. TechCrunch. "Elon Jet, the Twitter Account Tracking Elon Musk’s Flights, Was Permanently Suspended."

  21. CNN. "Elon Musk Bans Several Prominent Journalists From Twitter, Calling Into Question His Commitment to Free Speech."

  22. The New York Times. "Twitter Reinstates Suspended Accounts of Several Journalists."

  23. Elon Musk on Twitter. "Last Night, Car Carrying...."

  24. NBC News. "California Police Say Member of Elon Musk's Security Team is a Suspect Following Stalker Claim."

  25. City of South Pasadena. "Vehicle Assault."

  26. The Verge. "Twitter Abruptly Bans All Links to Instagram, Mastodon, and Other Competitors."

  27. Elon Musk on Twitter. "Going Forward, There Will...."

  28. Twitter. "Social Platforms Policy."

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