Tesla is cutting 9% of its workers as part of a reorganization created to reduce costs and help the electric automaker become profitable, according to an email CEO Elon Musk sent to employees Tuesday and obtained by Fortune.
Tesla employed more than 37,000 people at the end of past year.
Tesla (TSLA) is cutting 9% of its workforce at a time when the electric-car maker is aggressively ramping production for its Model 3 sedan, the company confirmed in a memo to employees Tuesday.
Tesla has been burning cash nearly continuously since it was founded 15 years ago.
"Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are hard to justify today", the message begins, in an apparent effort to claim that the cuts are not as the result of persistent problems at the company, including a massive debt pile, growing costs, significant production problems and nervous investors.
To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company.
The company added that its rapid growth over the past several years has resulted in some duplication of roles and job functions.
Musk in the email thanked the employees leaving the company and said the individuals will receive compensation. That is a valid and fair criticism of Tesla's history to date.
Musk's note also said that Tesla will end distribution of its solar power and home battery equipment at Home Depot and focus on direct sales instead. I'm deeply grateful for your many contributions to our mission. The company let go of 400 to 700 workers last fall after completing annual performance reviews, and it laid off a small number of workers back in 2008.
The company is making the move now so it never has to do it again, he wrote.