Employees told the paper that they received "little or no warnings" before the firings, which reportedly targeted 400 to 700 employees, leading to "lowered morale through many departments".
Tesla confirmed that only salaried employees will be laid off and no production associate will be let go as Tesla is still focused on increasing Model 3 production.
Musk, 46, has said Tesla is on the cusp of making money by turning a corner with the Model 3.
A sign is seen outside Tesla Motors' new showroom in Manhattan's Meatpacking District in New York City, U.S., December 14, 2017. Tesla still has a significant need for production workers as it tries to reach Model 3 manufacturing targets, he wrote in the email.
Hurricane Center monitoring storms over Caribbean Sea
Should this become the second tropical system of the season, and strengthens beyond depression strength, it would be named Beryl. The worst drought in the U.S.is in the Southwest, with the most severe conditions in Arizona, New Mexico , Utah and Colorado.
"Given that Tesla has never made an annual profit in the nearly 15 years since we have existed, profit is obviously not what motivates us", Musk wrote.
Tesla in May announced a pending restructuring. Moreover, he said that this round of layoffs is necessary so that "we never have to do this again". He said Tesla's rapid growth in recent years contributed to the duplication of roles and creation of jobs that the company could no longer justify. The firm has a sector weight rating and a $300 "fair value" price target on Tesla shares, which were up about 4% in pre-market trade Tuesday.
Tesla employees based at US DIY chain Home Depot and involved with the home solar business Tesla acquired when it bought SolarCity are among those affected, he said.
Consumer Edge Research Analyst James Albertine wrote in a note to investors that he views the moves "as a positive in helping Tesla track toward profitability later this year". The company would seek to reemploy Tesla employees at Home Depot stores at its own locations.