Tesla isn't letting go any production associates, as the company is trying to ramp up Model 3 production.
The move is part of an organizational restructuring that Musk announced earlier in the year.
Mr Musk said the job cuts were a "difficult decision". Instead, he said that the cuts were made to job functions that, "are hard to justify today".
Tesla is cutting 9% of its workers as part of a reorganization created to reduce costs and help the electric automaker become profitable, according to an email CEO Elon Musk sent to employees Tuesday and obtained by Fortune.
Musk in the email thanked the employees leaving the company and said the individuals will receive compensation.
In the note, which he tweeted out after it was leaked to media outlets, Musk said that almost all of the cuts would be salaried positions, and that the production staff is largely unaffected.
Tesla has been burning cash nearly continuously since it was founded 15 years ago.
"Profit is obviously not what motivates us", Musk wrote. The firm has a sector weight rating and a $300 "fair value" price target on Tesla shares, which were up about 4% in pre-market trade Tuesday.
Musk wrote in the email that the company will never achieve its mission to help move the world to cleaner energy "unless we eventually demonstrate that we can be sustainably profitable".
It will instead "focus our efforts on selling solar power in Tesla stores and online", he said.
"9 percent job cut is a good number and I don't think there will be more job cuts in the near term", Efraim Levy, analyst at CFRA Research said.
Tesla's workforce has grown at an incredible pace since the acquisition of SolarCity, which pushed Tesla's total headcount to over 30,000 employees. Each time, after a few quarters of small profits, Tesla would ramp up production of another auto model-first the Model X, then the Model 3-and rack up more big losses, as this chart from Bloomberg shows.