"As part of this effort, and the need to reduce costs and become profitable, we have made the hard decision to let go of approximately 9 percent of our colleagues across the company", Musk wrote".
Tesla would not say how much money the layoffs would save, but said no factory workers would be affected as the company continues to ramp up production of its lower-priced Model 3 compact vehicle.
While that email was sent only to employees, Musk then tweeted the full text immediately afterwards and it is clear that the missive was created to be read by external critics and anxious investors.
Despite glowing reviews and a cult-like following of eager buyers, new Model 3s have trickled out of Tesla's factories months behind schedule.
Tesla has never been profitable in its 15-year existence.
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".
In the email, he said the cuts are aimed at eliminating duplicate roles and he does not expect them to affect the firm's production ability.
Tesla will provide "significant" salary and vesting stock to employees being dismissed, Musk said.
The "majority" of those workers will be offered positions in Tesla's retail business, Mr Musk added. Musk also has talked about a restructuring of its production line, after failing to meet Model 3 goals. The company would also end its residential sales agreement with Home Depot to sell more solar panels and battery storage in Tesla stores and online. Tesla is up 11.3% this year.
At the start of April, the company's shares had fallen by around 35 percent from a peak hit last September but signs that it is on course to meet an output target of 5,000 Model 3 cars per week have wiped out nearly all of this year's losses.
It means that Tesla could let go over 3,000 employees in this round of layoffs.