Electric car maker Tesla is planning to fire around seven percent of its full-time staff, as the road ahead will be “very difficult,” according to an email sent to employees by CEO Elon Musk.

In the letter, published on Tesla’s website, Musk cited “tiny” profits and pressure to deliver lower cost Model 3 vehicles “in all markets” as the key reasons for the decision. He stressed that the company, which is younger than other players in the industry, will face difficulties in its long-term goal to sell affordable renewable energy products at scale.

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“Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Musk said.

The news comes as the producer has announced cost-cutting measures to reduce the price of its products and boost margins. Tesla stock was down over seven percent in early trading on Friday.

“Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity, but succeeding in our mission is essential to ensure that the future is good, so we must do everything we can to advance the cause,” Musk said.

Last year, Elon Musk boasted that the company’s staff totaled 45,000 people, which means that the pending cut would put 3,150 out of work. Musk did not specify which staff are most at risk of being fired, suggesting the layoffs could be spread throughout the company.

“To those departing, thank you for everything you have done to advance our mission. I am deeply grateful for your contributions to Tesla. We would not be where we are today without you,” Musk wrote.

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