Tesla has a reputation as a demanding place to work, and the company lived up to its reputation this week when it fired hundreds of workers. The San Jose Mercury News estimates that between 400 and 700 workers were let go, based on employee reports.

“Like all companies, Tesla conducts an annual performance review,” a Tesla spokesman told Ars. “This includes both constructive feedback and recognition of top performers with additional compensation. As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world.”

Tesla told the Mercury News that most of the departures were in administrative and sales positions, outside of manufacturing. The company declined to give the overall number of employees let go.

Tesla also told the paper that the process had boosted employee morale, since high-performing employees got additional compensation. But some employees who talked to the paper said the firings hurt morale.

The firings come at a challenging time for the company. Tesla is trying to ramp up production on its mass-market Model 3 car, and CEO Elon Musk had hoped to produce about 1,600 cars for the third quarter. The company produced 260 vehicles instead. Recent reports indicate that Tesla has been forced to produce some parts by hand, slowing the overall assembly process to a crawl.

Tesla CEO Elon Musk is a famously demanding and mercurial boss. Musk himself is legendary for working long hours as he serves as CEO of Tesla and SpaceX simultaneously, and he demands long hours and high performance from employees.