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Elon Musk. Photo: Mario Tama/Getty Images

Tesla is slashing its full-time workforce by about 7% as production of the Model 3 sedan ramps up, CEO Elon Musk said in a company email on Friday.

Why it matters: The announcement comes as Musk is trying to make good on pledges to begin offering lower-priced variants of its Model 3, a car critical to the company's future.

  • Musk acknowledged that "the road ahead is very difficult."
  • "[S]tarting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles," he wrote.
  • Musk also said that the company's 4th-quarter financials are again expected to show a profit, albeit smaller than its Q3 profit of 4%.
  • In pre-market trading, Tesla's stock dropped roughly 6% after showing even steeper declines earlier in the morning.

By the numbers: Currently the cheapest Model 3 is a 264-mile range that's $44,000, Musk noted.

  • "The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely."

Where it stands: Per Bloomberg, a 7% workforce cut means shedding about 3,150 jobs. From their piece...

  • "While it succeeded in scaling up output of its Model 3, the company missed analysts’ production targets during the fourth quarter, and it’s had to cut prices to make up for the halving of a U.S. federal tax credit that’s helped spur sales."

Editor's note: This story was updated with new market information.

Go deeper

CDC to cut guidance on quarantine period for coronavirus exposure

A health care worker oversees cars as people arrive to get tested for coronavirus at a testing site in Arlington, Virginia, on Tuesday. Photo: Olivier Douliery/AFP via Getty Images

The CDC will soon shorten its guidance for quarantine periods following exposure to COVID-19, AP reported Tuesday and Axios can confirm.

Why it matters: Quarantine helps prevent the spread of the coronavirus, which can occur before a person knows they're sick or if they're infected without feeling any symptoms. The current recommended period to stay home if exposed to the virus is 14 days. The CDC plans to amend this to 10 days or seven with a negative test, an official told Axios.

  • The CDC did not immediately respond to a request for comment.
2 hours ago - Health

CDC panel: COVID vaccines should go to health workers, long-term care residents first

Hospital staff work in the COVID-19 intensive care unit in Houston. Photo: Go Nakamura via Getty

Health-care workers and nursing home residents should be at the front of the line to get coronavirus vaccines in the United States once they’re cleared and available for public use, an independent CDC panel recommended in a 13-1 emergency vote on Tuesday, per CNBC.

Why it matters: Recent developments in COVID-19 vaccines have accelerated the timeline for distribution as vaccines developed by Pfizer and Moderna undergo the federal approval process. States are preparing to begin distributing as soon as two weeks from now.

Obama: Broad slogans like "defund the police" lose people

Snapchat.

Former President Barack Obama told Peter Hamby on the Snapchat original political show "Good Luck America" that "snappy" slogans such as "defund the police" can alienate people, making the statements less effective than intended.

What he's saying: "You lost a big audience the minute you say it, which makes it a lot less likely that you're actually going to get the changes you want done," Obama told Hamby in an interview that will air Wednesday morning at 6 a.m. EST on Snapchat.