In an email obtained by CNBC, Tesla CEO Elon Musk said the company has not "made an annual profit in the nearly 15 years since" it was founded. In a statement to the NLRB a year ago, it said: "At Tesla, we strive to be a fair and just company, the only kind worth being".
Tesla (NASDAQ:TSLA) did say that the cuts would be primarily salaried positions in duplicate roles and that those affected would be offered jobs in its retail business. The statement was part of a hearing on whether Tesla has violated workers' rights.
Musk said those losing their jobs will be informed this week.
Tesla has been trying to hit a 5,000 per week production target of its Model 3 sedans after facing initial production hiccups. Musk said last month that the company would conduct a "sort of reorganization" but did not discuss specifics. But Musk has promised an acceleration of Model 3 manufacturing, which will allow the company to bring in a lot more revenue.
Tesla told CBC News that it had over 42,000 employees around the world.
The news is the first sign that Musk has had little choice but to respond to his investors' concerns, no doubt because he realizes he will need to go to them again soon for more cash.
Musk also used the internal missive as an opportunity to announce that Tesla's solar energy sales program with Home Depot stores is ending. The laid off employees would receive "significant" salary payments and stock in Tesla as compensation.
"Difficult, but necessary Tesla reorg underway", CEO Elon Musk wrote on Twitter.
Musk cast the layoffs as part of a "comprehensive organizational restructuring", one goal of which is to "flatten our management structure to help us communicate better, eliminate bureaucracy and move faster". "It is very hard to say goodbye", the CEO wrote. "Despite our tiny size, Tesla has already played a major role in moving the auto industry towards sustainable electric transport and moving the energy industry towards sustainable power generation and storage", noted the billionaire.