Last year was "the most successful year in Tesla's history," with sales almost as high as all previous years combined—but around 3,000 workers are going to have to lose their jobs because the company's cars are too expensive, Elon Musk wrote in a letter to employees Thursday. The CEO wrote that while they "have made great progress" in making the company's vehicles cost-competitive with those using fossil fuels, "our products are still too expensive for most people," the BBC reports. He said that the surprise third-quarter profit was "the first meaningful profit" in Tesla's existence, but it will be lucky to have a "tiny profit" this quarter.
Musk warned employees that the company has a "very difficult" road ahead, as "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." He said the company has "no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support)." That works out to around 3,000 of Tesla's 45,000 employees. Musk added that the company will "retain only the most critical temps and contractors." Shares in Tesla, which will report results on Feb. 5, fell 8% in after-hours trading, Business Insider reports. (In June last year, Tesla announced the biggest round of layoffs in its history.)