Tesla Inc. is cutting its workforce by 7% as part of its cost-cutting efforts aimed at selling Model 3 sedan at a lower price, the Wall Street Journal reported on Friday citing a memo written by CEO Elon Musk to his employees. Meanwhile, the company's shares were down almost 4.5% during premarket trading and following the news report.
"Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months," Musk stated in the memo. "Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company," he pointed out.
Earlier, the Chinese State Administration of Market Regulation announced that Tesla is recalling more than 14,000 S Electric Cars over a fault in the Takata airbags.
