On Tuesday, June 12, Tesla (TSLA  ) announced that it would cut its work force by 9%, losing about 3,500 of its 37,500 employees. The cuts are part of a "thorough reorganization" of Tesla.

The cuts come as CEO Elon Musk attempts to push the company into profitability. In an internal email, Musk explained, "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla's history to date."

Tesla has lost money ever year since it was founded in 2003, including $785 million on a revenue of $3.4 billion in the first quarter of 2018. The company also burned through $745 million in cash, a dramatic increase from the $112 million it spent the previous quarter. Tesla's financials are problematic enough that Moody's Investors Service cut Tesla's credit rating back in March.

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Despite the layoffs, Musk insists that the company is still on track to meet their production goals for the Model 3, the first Tesla vehicle designed and priced to appeal to the mass market. The cuts mostly spared production workers, instead focusing on salaried employees to minimize the impact on production schedules. Tesla is making about 3,500 Tesla Model 3s weekly, and hopes to boost that number to 5,000 by the end of June. If the company is able to reach and maintain this goal, it's expected they will become profitable; indeed, Musk has said he plans to have a company turn a profit by the third quarter of 2018, though Musk has been wrong in the past. If the company can't turn a profit, it may need to raise another round of capital.

The Model 3 is particularly important because Tesla is relying on strong sales of the model to fund other expensive projects currently in development. But it has been plagued by problems due, missing multiple production benchmarks, with production unable to rise to more than 2,000 cars a week.

The pressure to hit production goals is so intense that some workers have complained that Musk has disregarded employee safety and skimped on quality materials, relying on reworked or repaired parts from outside companies.

After Musk's announcements, Tesla's stock closed at $342.77 with a profit of more than a 3% gain on Tuesday.