• In its third-quarter earnings call on Wednesday, Tesla CEO Elon Musk said the company has fired 2% of employees, 700 people total, for poor performance.
  • Tesla shares dropped more than 3% after record losses.
Elon Musk, chairman and chief executive officer of Tesla Motors

During a third-quarter earnings call on Wednesday, Tesla CEO Elon Musk acknowledged that his company recently fired 2% of its employees, or 700 total, for performance-related issues.

Musk said that as a relatively small competitor versus incumbents in automotive, Tesla must maintain a higher standard where employees skill-levels are concerned. "Only 2% of people didn't make the grade in our annual performance review," he said. The company also promoted thousands, he said, many in manufacturing.

Multiple current and recently fired Tesla employees previously told CNBC that they were surprised by the firings. Some claimed they had only received good performance reviews, while others say recent reviews were never completed or shared with them. Tesla declined to comment on these claims when previously contacted.

Tesla shares dipped today after the company posted record losses, and detailed ongoing challenges in vehicle manufacturing, as well as plans to spend north of $1 billion in the fourth quarter.

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