On Tuesday, Musk tweeted that the company will cut 9 percent of its workforce as part of the restructuring and to "become profitable". Musk has stated that 5,000 units a week by the end of the year is a critical number for Tesla to achieve sustainable profitability - something it has never done once in its 15-year history.
Tesla's latest annual filing last December showed it had 37,543 full-time employees.
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Tesla employees based at US DIY chain Home Depot and involved with the home solar business Tesla acquired when it bought SolarCity are among those affected, he said.
The announcement came in an email Musk sent to employees about a series of layoffs Tesla began this week.
The criticality of each position was evaluated to determine if certain jobs could be done more efficiently and productively, Musk said, adding that Tesla also assessed the specific skills and abilities of each individual within the company.
Tesla has been under intense pressure to prove that it can achieve mass production of the Model 3, its first mass market vehicle. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network.
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Musk referenced "a company-wide restructuring", which was reported last month by Electrek. As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission.
Tesla has been burning cash nearly continuously since it was founded 15 years ago.
"It is very hard to say goodbye", Musk said in the letter. Tesla will, however, continue to take on new staff, as a "significant need for additional production personnel" remains within the company. Moreover, he said that this round of layoffs is necessary so that "we never have to do this again".
What do you think the future holds for Tesla?
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