Tesla, once a buzzy startup that’s now the most popular maker of luxury electric cars, is now faced with parting with many of its recently hired employees.
The company announced Friday that it will be cutting 3,150 employees, or 7 percent of its workforce. In October, CEO Elon Musk said that his Palo Alto, California based company had 45,000 employees.
Tesla’s earlier successes came with sales of the higher priced cars in the United States. It raised $1.75 per share last quarter. But Musk acknowledged that Tesla needs to start selling more moderately priced cars, like its Model 3, to keep its momentum.
“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,” said Musk in a letter to employees.
Tesla had raised its payroll to meet a production quota of 500,000 vehicles, which it set three years ago. Last year it sold 245,000, less than half that goal.