Electric car maker Tesla on Friday announced it is laying off seven per cent of its full-time staffers in an attempt to reduce costs and increase profits.
The news comes on the heels of Tesla CEO Elon Musk laying the foundation of a Tesla Gigafactory in Shanghai earlier this month -- the first outside the US.
All Tesla employees were informed about the development in an email.
"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.
"Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity, but succeeding in our mission is essential to ensure that the future is good, so we must do everything we can to advance the cause," Musk wrote in a blog post.
Musk said that the company unfortunately has no choice "but to reduce full-time employee headcount by approximately 7 per cent (we grew by 30 per cent last year, which is more than we can support) and retain only the most critical temps and contractors".
The China factory that is expected to produce 500,000 electric vehicles per year and double the production capacity of Tesla, will begin with the production of Model 3.
Earlier this month, Musk also tweeted saying SpaceX is laying off 10 per cent of its 6,000-person workforce as it tackles two hugely expensive projects, the company said.
"To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based Internet, SpaceX must become a leaner company," the Elon Musk-owned company said in a statement.
SpaceX, which has a contract with NASA to deliver cargo to the International Space Station (ISS), is now planning to start flying astronauts to the ISS for NASA sometime this year.