Tesla to Cut 7% of Workforce

Tesla Inc. (NASDAQ: TSLA) is cutting its full-time staff headcount by approximately 7%, as it ramps up production of its Model 3 sedans, CEO Elon Musk said Friday.

The announcement come on the back of various cost-cutting measures the company has made of late, as it looks to reduce the price of its products and boost margins.

In an email to employees, Musk notes that the company faces a "very difficult" road ahead in its long-term goal to sell affordable renewable energy products at scale, noting the company is younger than other players in the industry.

"Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months," Musk said in the company update.

The exact number of employees that will be laid off as a result has not been disclosed, however, Musk last revealed that Tesla had a staff count of 45,000 in an October tweet. If still true today, that would mean 3,150 layoffs.

Earlier this week, the company discontinued the cheapest versions of its Model S sedans and Model X SUVs. And Musk said on Thursday that the firm would also ditch its customer referral program, which rewarded perks likes six months of free charging, as it was "adding too much cost to the cars."

Shares in Tesla slouched $27.09, or 7.8%, at Friday’s open to $320.22, within a 52-week range from $244.59 to $387.46.