From Crypto to Main Street – Job Cuts at Elon Musk’s SpaceX, BlackRock, Bitmain, ShapeShift, Ford, Jaguar Land Rover
“Extraordinarily difficult challenges ahead” is the phrase SpaceX president Gwynne Shotwell penned in an email on Friday that was provided to the Los Angeles Times. It addressed the company’s decision to lay off 10% of its 6,000 employees.
SpaceX, founded by Tesla entrepreneur and engineer Elon Musk in 2002 to explore space and colonize Mars, is not alone in its efforts to optimize operations by slashing jobs. It joins several other high-profile companies that are executing plans to restructure by eliminating positions, collapsing divisions and trimming personnel.
According to a Bloomberg report dated January 10, an internal memo by BlackRock, the world’s largest asset manager with $6.3 trillion under management, specifies that it will lay off about 500 employees, roughly 3% of its global workforce.
The layoffs are rolling across a range of industries and are undermining the most recent US jobs report published on January 4. The report shows that 312,000 non-farm jobs were added to the economy, relieving fears that a recession is underway. But recent job cuts appear to echo the downturn in the markets, the economic blow of US-China trade tensions and more bearish sentiments about the strength of the global economy.
The New York Times reports that a spokesperson from Ford confirmed massive layoffs in Europe where the company employs roughly 68,000 workers. The layoffs are expected to be in the thousands. Consolidation plans may also include shutting down a transmission factory in Bordeaux, France at the end of August; shutting production on two minivan models in Germany; and trimming back personnel at its headquarters in the UK.
More automaker job cuts are underway at Jaguar Land Rover. The company plans to slash roughly 10% of its workforce worldwide or nearly 4,500 employees, after having cut 1,500 jobs in 2018.
Bitcoin and crypto have been just as volatile and destructive with layoffs impacting startups and blockchain initiatives.
In a blog posted on January 8 entitled “Overcoming ShapeShift’s Crypto Winter and the Path Ahead,” Erik Voorhees, CEO of Shapeshift, a crypto company that allows people to buy and sell digital assets, announced 37 layoffs. The cuts have reduced the company’s staff by 33%, following a year of epic expansion when ShapeShift grew 3,000% in 2017.
Amid Bitmain’s dwindling market share of Bitcoin’s mining pools, the world’s largest maker of mining rigs is also downsizing. According to a report published on January 10 by South China Morning Post, Bitmain is laying off a third of its 3,000 staffers as it copes with the fall-out of the crypto bear market.
John Graham, a finance professor at Duke’s Fuqua School of Business and the director of the world’s longest-running research on senior financial executives, says global economic growth is in a downward spiral.
“The end is near for the near-decade-long burst of global economic growth. The US outlook has declined, and moreover the outlook is even worse in many other parts of the world, which will lead to softer demand for US goods.”
According to the CFO survey conducted by Graham, nearly half of US chief financial officers believe the US economy will enter a recession by the end of 2019.
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