Nikes to hire 2,000 new employees as Tesla and Nike brace for job cuts
Tesla, Nike and other companies are preparing to close more than 1,000 jobs as the company grapples with a massive cash crunch amid a massive slowdown in demand for its electric vehicles.
The company’s stock is down more than 40% since early June after news that it had to shut down production at its Fremont, California factory after a major recall triggered a global economic downturn.
Tesla, the country’s biggest carmaker, said it would cut production in two or three months, but in a filing with the Securities and Exchange Commission on Tuesday, it said it had plans to hire 1,200 new employees and add 1,800 more positions in its Fremona, California, and Reno, Nevada plants.
Nike also said it was hiring a combined 2,100 new workers at its factories in Michigan, Ohio and Indiana, as well as a smaller number in the United Kingdom.CEO Dan Ammann said the companies planned to cut jobs “so that we can make more vehicles, but also to give us the flexibility to grow our workforce in a more sustainable way.”
Nike said the Fremont plant would shut down for an unspecified period and that the Ohio plant would be “re-opened.”
Tesla, meanwhile, said its Fremons factory would remain open, but the Reno plant would close.
The companies said that in each case, they would work to reduce the workforce.
Tesla said it plans to invest more than $2 billion in Fremont and Reno by the end of the year, but said it planned to invest only about $500 million in Fremons plant over the next three years.
Nikes investment will consist of a $400 million bond issuance, $300 million of debt issuance and $350 million of loan refinancing, the company said.
Tesla is currently trading at $145.10, up more than 6% over the past 12 months.
In addition, the companies said they plan to spend up to $1 billion annually on equipment purchases, which would increase their total annual investment to $4 billion.
The Tesla and Nissan factories are already closing as the industry tries to adapt to a global recession that has been fueled by the surging popularity of electric vehicles, including the Chevrolet Bolt EV, Ford Fusion EV and Toyota Prius hybrid.
The downturn in demand from consumers and a growing stock of demand for electric vehicles is forcing automakers to seek ways to reduce costs and increase profits.
Nissan, for instance, said last week that it would shut 1,600 jobs at its plant in Mexico.
Tesla said it will also cut 2,300 jobs at two of its Fremon, California factories.