"We, unfortunately, have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. 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's email read.
The company CEO explained that the company's third-quarter profit of 4 percent was partly the result of selling more expensive Model 3 variants in North America, while preliminary fourth-quarter results indicated the profit would be lower than in the previous quarter.
"This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit. However, starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles. Moreover, we need to continue making progress towards lower-priced variants of Model 3," Musk said.
Earlier in January, Elon Musk said Tesla would no longer take orders for cheaper — 75 kWh versions — of Model S and Model X.