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

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.

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.