Tesla said on Friday it would cut thousands of jobs to rein in costs as it plans to increase production of lower-priced, less-profitable versions of its Model 3 sedan, sending its shares down 7 percent, according to autoblog.
The company, which has struggled to achieve long-term profitability and keep a tight lid on expenses, also said it expects fourth-quarter profit to be lower than the previous quarter.
Chief Executive Officer Elon Musk said the company would need to deliver at least the mid-range Model 3 version in all markets starting around May, as it needs to reach more customers who can afford the vehicles.
In addition, Tesla said it needs to continue making progress toward a lower-priced Model 3.
But Tesla has struggled to get the Model 3 into the hands of customers, many of whom have been waiting since early 2016, and Musk said last year that Tesla had moved from "production hell to delivery logistics hell."
This is Tesla's second job cut in seven months and comes just days after it cut U.S. prices for all vehicles and fell short on quarterly deliveries of its mass-market Model 3 sedan.
In a memo to employees on Friday, Musk said 2018 was the "most challenging in Tesla's history," adding the company hired 30 percent of its employees last year, which was more than it could support.
"I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult," Musk said.
"There isn't any other way," he added.
Tesla reported a profit of $311.5 million, or $1.75 per share, for the third quarter ended Sept. 30.
Musk, who has often set goals and deadlines that Tesla has failed to meet, surprised investors by delivering on his pledge to make the company profitable in the third quarter, for only the third time in its 15-year existence.