London (CNN Business) Tesla has announced plans to reduce its full-time workforce by 7% as it works to increase Model 3 production and cut prices.

CEO Elon Musk told workers about the job cuts Friday in a letter that Tesla posted online . The company will only retain the most critical temps and contractors, Musk said.

Musk wrote in the letter that Tesla is "up against massive, entrenched competitors" and must work "much harder than other manufacturers to survive while building affordable, sustainable products."

"To those departing, thank you for everything you have done to advance our mission," he said. "I am deeply grateful for your contributions to Tesla."

Tesla currently has about 45,000 employees, so 3,150 people will be losing their jobs.