Elon Musk backtracks on 10% job cuts claim, while dollar strength hits Microsoft earnings
Thursday 09 Jun 2022 Author: Steven Frazer

Elon Musk has again thrust Tesla (TSLA:NASDAQ) into the headlines after knocking back earlier suggestions that the world’s leading electric car maker would be cutting staff numbers by 10%.

Adding to growth investor jitters was a cut to fourth-quarter guidance by mega-cap software firm Microsoft (MSFT:NASDAQ) on a strong dollar.

Microsoft is just the latest US firm to warn on the impact of a stronger dollar which could make products and services more expensive outside the US and impact the relative value of earnings derived from overseas.

Tesla investors have become used to share price sensitivity to Musk’s frequent use of Twitter (TWTR:NYSE), the platform he now appears to be trying to wriggle out of buying.

‘Total headcount will increase, but salaried should be fairly flat,’ Musk tweeted on 4 June, in response to an unverified Twitter account that made a ‘prediction’ that Tesla’s headcount would increase over the next 12 months.

The exchange followed an email that reportedly circulated through Tesla last week that stated Musk had a ‘super bad feeling’ about the US economy and needed to cut jobs by about 10%.

That revelation sent Tesla stock sharply lower, falling more than 9% from $775 on 3 June. The share price has so far struggled to recoup those losses despite Musk’s apparent attempts to quell concerns, trading at $714.84.

Microsoft trimmed fourth quarter earnings to between $2.24 and $2.32 per share from a previous expectations of between $2.28 and $2.35 per share.

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