Tesla will reduce its full-time work force by 7 percent in an effort to lower the cost of producing its Model 3 sedan and make it a mass-market vehicle, Elon Musk, the electric-car maker’s chief executive, told employees on Friday.
The least-expensive version of the Model 3 now available costs $44,000. Mr. Musk said in a companywide email that he wanted the lowest-priced Model 3 to sell for $35,000.
To do so, Mr. Musk said in the email, Tesla must improve the car’s design, increase production and shed thousands of workers. “There isn’t any other way,” he wrote.
Tesla shares closed down 13 percent after the announcement.
The cuts, which could put more than 3,000 people out of work, follow a 9 percent reduction in Tesla’s staff in June. Another of Mr. Musk’s companies, the privately held rocket maker SpaceX, said this month that it would shrink its work force by about 10 percent.
Given the continuing uncertainty in global financial markets and signs that consumers are spending less, trimming costs to focus on affordability is “a prudent thing to do” for a company that started out selling cars with an average price close to $100,000, said Romit Shah, a research analyst at Nomura Instinet.
In October, Tesla reported that the third quarter of 2018 had yielded its first quarterly profit in two years, and its largest ever, thanks to cost-cutting moves, delayed payments to suppliers and a surge in production and sales.