Tesla Inc. plans to eliminate 7% of its full-time workforce, the auto maker’s second round of job cuts in a year as it tries to maintain profitability while lowering the price of its Model 3 sedan.

The maker of electric vehicles has been jacking up production of the Model 3 while chasing its long-held dream of selling it at $35,000 to make it a mainstream sedan. Chief Executive Elon Musk, in a memo early Friday reviewed by The Wall Street Journal, told employees preliminary results show Tesla made a profit in the final three...