Tesla's announcement comes a month after Musk announced a restructuring of Tesla's organizational chart.
Mr Musk said the job cuts were a "difficult decision".
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.
Tesla has been burning cash nearly continuously since it was founded 15 years ago.
Last week, Musk overcame an attempt to strip him of his role as chairman of Tesla's board, a plan introduced by a company shareholder who raised doubts about Musk's ability to manage multiple companies simultaneously. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network.
The San Jose Mercury News, which first reported the firings, said the departures included "engineers, managers and factory workers".
Musk wrote in the email that the company will never achieve its mission to help move the world to cleaner energy "unless we eventually demonstrate that we can be sustainably profitable". We are a small company in one of the toughest and most competitive industries on Earth, where just staying alive, let alone growing, is a form of victory (Tesla and Ford remain the only American auto companies who haven't gone bankrupt). Tesla still has a significant need for production workers as it tries to reach Model 3 manufacturing targets, he wrote in the email.
Up almost 7 percent earlier on Tuesday, shares of the company trimmed gains to stand 3.5 percent higher at $344 by early afternoon.
Tesla has promised to hit a 5,000-cars-per-week production target for the Model 3 by the end of this month. It can easily top $50,000 with options.
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