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".
CEO Elon Musk says in an e-mail to workers Tuesday that the cuts amount to about 9 per cent of the company's work force of 40,000.
Tesla would not say how much money the layoffs would save, but said no factory workers would be affected as the company continues to ramp up production of its lower-priced Model 3 compact vehicle.
Last month Mr Musk said the company was planning a wide-ranging reorganisation that would flatten its management structure.
Tesla's latest annual filing last December showed it had 37,543 full-time employees. Tesla still has a significant need for production workers as it tries to reach Model 3 manufacturing targets, he wrote in the email.
Image Elon Musk announced the plans in an email to employees which was later leaked
While saying that Tesla is more focused on producing environmentally friendly cars than making money, Musk ask added that "we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable". Moreover, he said that this round of layoffs is necessary so that "we never have to do this again". 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.
The cutbacks come at a time when Chief Executive Elon Musk has said Tesla would be profitable in the third and fourth quarters.
Tesla has been burning cash nearly continuously since it was founded 15 years ago.
"Our checks with sales centers indicate Model 3 deliveries are tracking [about] 50% higher than our prior estimates for the quarter, prompting us to raise our estimates", Erikson said in a note, according to CNBC.
He wrote that reaching Musk's Model 3 production goal of 5,000 vehicles per week by the end of June is still the primary driver of profitability.
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