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Global companies set to brace for uncertain times

Posted July. 22, 2022 08:05,   

Updated July. 22, 2022 08:05


U.S. automaker Ford plans to cut jobs, and Microsoft, which has already cut more than 1,000 employees, is set to reduce new hiring. Tesla, which has also announced to cut jobs, has sold 75 percent of its Bitcoin holdings to increase the company’s overall liquidity. Global companies are bracing for uncertain times amid the looming economic downturn.

The Wall Street Journal reported on Wednesday that Ford is planning to lay off 4,000 to 8,000 employees. Although the exact size or timing of the cuts are not yet determined, the cuts will be focused on the company’s salaried workforce in the internal combustion engine operations. James Farley, president and CEO of Ford, who took office in October 2021, said the company will save 3 billion dollars in costs to prepare budgets to shift to electric vehicles. The Bloomberg also reported that Microsoft, which has recently laid off one percent of its 180,000 employees, plans to cut new hiring out of concerns for possible economic downturn.

Tesla, having laid off 200 employees last month, sold 75 percent of its Bitcoin holdings into fiat currency of 936 million dollars. Tesla CEO Elon Musk said in a conference call that the company needed to bolster its cash reserves due to China’s lockdown policy in response to COVID-19 increased uncertainties. However, Mr. Musk said, the selloff of Bitcoin “should not be taken as some verdict on Bitcoin.”

Tesla’s second-quarter earnings increased by 42 percent year-on-year to 16.934 billion dollars. The company’s net profits surged by 98 percent year-on-year to 2.259 billion dollars. However, inflation and the strong dollar took a bite out of the earnings of Tesla from first-quarter earnings (3.3 billion dollars). The Wall Street Journal reported that Tesla’s streak of record quarterly profits has been broken.

Hyoun-Soo Kim kimhs@donga.com