Enlarge / Tesla's Shanghai factory in 2023.VCG/VCG via Getty Images

Times are starting to get tough for Tesla. The electric vehicle automaker had been riding high, with quarter after quarter of successive growth and plenty of profits in the process. But lately, that success has mostly been due to a series of price cuts meant to tempt customers to buy into an aging lineup. This March, the company reported its first quarterly decline since 2020.

Now, it plans to lay off more than 10 percent of its workforce, according to an internal memo seen by Reuters.

"As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity," Tesla CEO Elon Musk told employees in the memo.

Musk has pursued a strategy of relentless cost-cutting, but all those price cuts have meant Tesla's once-envied profit margins are now nothing special.

"As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10 [percent] globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative, and hungry for the next growth phase," Musk wrote.

Tesla's limited aging product portfolio is starting to become a problem in the face of stiff competition in China. Its newest vehicle is the Cybertruck, a large and controversial pickup with limited appeal outside of North America's wide roads and parking spaces. And plans for a cheap two-seat Model 2 have been axed in favor of a robotaxi.