Tesla CEO Elon Musk announced will lay off about 7 percent

Tesla CEO Elon Musk announced Friday in a company-wide memo that his company will lay off about 7 percent of its total workforce as a result of economic challenges.

In a letter shared with all employees and posted on Tesla’s website, Musk pointed to the high cost of his vehicles as a barrier to reaching a larger segment of American consumers and a chief reason for the company’s troubles.

“While we have made great progress, our products are still too expensive for most people,” Musk told Tesla employees. “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.”

“As a result of the above, we unfortunately have 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) and retain only the most critical temps and contractors,” he continued in the memo.

Further design and manufacturing improvements, he added, were necessary if the Tesla was to become a profitable sales model for the company.