Tesla layoffs ominous sign for white-collar workers
Recent reports of layoffs at Tesla are an ominous sign for white-collar workers nationwide, “Big Short” investor Michael Burry predicted on Wednesday.
Burry argued that blue-collar workers will stay in hot demand in a labor market that has remained tight so far despite a looming recession – while office workers could face job and salary losses.
“I see a bifurcated labor market developing as unskilled and semi-skilled remain in short supply, but white-collar workers, having proven their redundancy during COVID, will find gross excess in the labor market, pressuring wages at the end,” Burry tweeted.
The hedge fund chief weighed in on current labor market conditions while sharing a link to a report detailing Tesla’s move to lay off about 200 workers, including data analysts, and shut down a San Matteo office dedicated to the company’s “Autopilot” semiautonomous driving system.
Tesla’s latest round of layoffs occurred weeks after CEO Elon Musk unveiled plans to slash 10% of the company’s salaried workers. The billionaire has warned that he has a “super bad feeling” about the state of the US economy.
Despite the cuts, Musk still expects Tesla’s overall workforce to expand in the months ahead.
“A year from now, I think our head count will be higher in both salaried and obviously in hourly,” Musk said during an interview with Bloomberg.
Wages have risen over the last year as companies compete for workers during a period in which the national unemployment rate has fallen below 4%. But inflation has largely erased those wage gains for many workers, and unemployment is expected to rise as the Federal Reserve hikes interest rates.
Aside from his labor market forecast, Burry has made a series of predictions about what’s next for the US economy in recent days.
Earlier this week, Burry tweeted that a supply chain phenomenon known as the “bullwhip effect” could force retailers to lower their prices, thereby cooling inflation and incenticizing the Fed to reverse course on its planned rate hikes.
Burry, who often deletes his tweets shortly after he posts them, also warned in late May about a “consumer recession” as inflation cuts into household savings amassed during the COVID-19 pandemic.
Burry, 51, is the founder and boss at Scion Capital Management. Actor Christian Bale portrayed Burry in “The Big Short,” the 2015 film chronicling his bet against the subprime mortgage crisis during the Great Recession.