Tesla has announced it is cutting 9% of staff, risking 4,000 jobs worldwide, in a move designed to improve profitability.
In a leaked email to employees, Elon Musk said the cuts to the electric carmaking company are part of a restructuring which is needed to focus more on costs.
"Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us," according to the email.
It added: "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable."
The businessman called the cuts "difficult but necessary" on Twitter.
Salaried staff are at risk of losing work, although production staff will not be affected by the cuts.
Some of those affected are employees based at US DIY chain Home Depot – Musk has said that the "majority" of these workers will be offered jobs in Tesla's retail business.
Last month, Musk had hinted at a reorganisation but did not give details.
He has said the changes will not affect the production of its much-anticipated new Model 3 sedan.
The company's first two major vehicles sell for around £56,000, but the new model will be much cheaper, with prices starting from around £26,000.
Competitor General Motors has since released its own model for this market, the Chevrolet Bolt, which is part of plans to launch more than 20 new electric vehicles worldwide by 2020.
Tesla earlier failed to reach a number of key benchmarks for Model 3, leaving Wall Street analysts concerned that Tesla would not reach its goals.
More from Elon Musk
Musk abruptly left a conference call with analysts six weeks ago, complaining of "dry" and "bonehead" questions on capital spending.
Tesla also came under fire recently when a car running on autopilot hit a barrier on a California highway, killing its driver.
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