At a time when both Tesla and its iconoclastic billionaire C.E.O., Elon Musk, are under increasing scrutiny—the former for looming production deadlines for its Model 3 sedan, the latter for his contretemps with the press and his Trumpian Twitter habit—the electric-car company has announced significant layoffs, the most in Tesla’s 15-year history. In a memo to employees, Musk announced that Tesla would be cutting 9 percent of its workforce, or about 3,000 employees. “Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions,” Musk wrote in the memo. “While they made sense in the past, [they] are difficult to justify today.”

Tesla’s headcount has indeed exploded over the past several years: after its 2016 acquisition of SolarCity, Tesla’s workforce swelled to more than 30,000 employees—a sizable number for a company that has never turned a profit and is expected to lose more than $1 billion over the next four quarters. Whether the culling will mark a turning point, however, remains to be seen. According to Musk, the cuts are targeting salaried employees, not jobs on the factory floor, so production of the company’s flagship Model 3 will be unaffected. “We made these decisions by evaluating the criticality of each position, whether certain jobs could be done more efficiently and productively, and by assessing the specific skills and abilities of each individual in the company,” Musk wrote. “We are also continuing to flatten our management structure to help us communicate better, eliminate bureaucracy and move faster.” He also confirmed that Tesla had decided not to renew a contract with Home Depot to sell its energy products at its stores.

Musk’s moment of reckoning was probably overdue. While investors have given Tesla a long leash, betting on Musk’s larger-than-life personality to transform the transportation industry, Wall Street has been getting jittery. Tesla, whose credit rating was downgraded in March, has about $1.2 billion in convertible bonds that begin coming due this year into next, a fair amount of debt for a company with a high burn rate. Analysts expect Tesla will need a cash injection of at least $2 billion this year to keep the lights on, although Musk has insisted otherwise. (In April, Musk claimed Tesla would be cash-flow positive and profitable in the second half of 2018.)

The fact that Musk is now trimming fat wherever he can is a tacit acknowledgment that his grand vision for Tesla is butting up against hard financial realities. According to Fortune, Tesla’s employee headcount had grown 15 percent in the past six months; cutting that number by 9 percent could save about $80 million a quarter in operating expenses in the future, after taking an extra financial hit this quarter (Tesla is “providing significant salary and stock vesting” to people who are being laid off, Musk wrote). “In the context of the company’s high cash-burn rate, $80 million per quarter may not sound like enough to have an impact,” venture capitalist Gene Munster said, according to Bloomberg. “But as the next several months may decide the fate of the company, every dollar counts.”

It is a humbling moment for Musk, after weeks of sparring with the press and investors about the company’s beleaguered financials. Last month, he dodged tough questions and berated analysts inquiring about capital requirements. (“Excuse me. Next. Next,” he said. “Boring, bonehead questions are not cool. Next?”) At the same time, Musk was careful in his memo not to deflate the utopian aspirations that have made Tesla more valuable than Ford Motor Co. “Tesla has already played a major role in moving the auto industry towards sustainable electric transport and moving the energy industry toward sustainable power generation and storage,” he wrote. “We must continue to drive that forward for the good of the world.” At the same time, he conceded that his mission to “accelerate the world’s transition to sustainable, clean energy” will be impossible if the company cannot turn a profit. “That is a valid and fair criticism of Tesla’s history to date.”

As he continues this balancing act—placating investors and shareholders while also hyping his myriad companies and coaxing along production of the Model 3—the latest round of layoffs at Tesla seems, above all else, a course correction. Better Musk cut some losses now than crash and burn down the line. As he wrote in his memo to employees, “We are making this hard decision now so that we never have to do this again.”