Local media reports said that Tesla dismissed several hundred employees throughout the company, and that the dismissals were the result of performance reviews.
Scores of Tesla employees were fired from the Palo Alto, California-based company in the past week, the company said.
A Tesla spokesperson said in an emailed statement to Business Insider on Friday night that the firings were due to annual performance reviews at the company.
"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,” the spokesperson said.
A former employee told Reuters "about 400 people" were among those who left the company, and that the positions ranged from "associates to team leaders to supervisors. We don't know how high up it went," the person said. Tesla declined to confirm how many people were fired.
The company said it expects to rehire for some of the newly vacant positions.
The turnover comes as the electric-car company is ramping up production of the Model 3 sedan, its first venture into the entry level luxury mass market. Tesla posted disappointing production numbers for the Model 3 last week, having completed just 260 examples of the car. The company had previously said it would crank out 1,500 in September and ramp up to 20,000 per month by December.
CEO Elon Musk blamed the shortfall on what he called "production bottlenecks," which prompted speculation that the assembly line at Tesla's Fremont factory was not yet ready to generate the kind of output needed to fill the roughly 455,000 Model 3 orders it has on its books. The Wall Street Journal said in a report last week that employees were making some Model 3 parts by hand.
A Tesla spokesperson refuted that claim in an email to Business Insider last week: "We are still in the beginning of our production ramp, but every Model 3 is being built on the Model 3 production line, which is fully installed, powered on, producing vehicles, and increasing in automation every day," the spokesperson said.
On October 8, Musk tweeted a video of the Model 3 assembly line, showing automated robots working on the bare-metal body of a Model 3, which began shipping in the third quarter of this year.
These most recent dismissals follow a spate of firings at Tesla's solar energy arm, SolarCity, which fired dozens of employees at its Northern California offices in September.
Read Tesla's full statement on the firings below:
"Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period. This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases. 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."