Tesla reportedly fired hundreds of underperforming workers at its plant in Fremont, California, as well as its Palo Alto headquarters.

Claiming it was weeding out underperforming employees, Tesla dismissed hundreds of employees at its Palo Alto, California, headquarters campus and its Fremont assembly facility, according to multiple reports.

The San Jose Mercury News puts the number of firings at between 400 and 700 people, and they affected everything from factory workers to engineers to managers. According to that report, workers were not given advance notice of the decision.

Tesla, in a statement, cited a company-wide annual review and said that it had not laid employees off, but rather that it let employees go based on lackluster job performance.

“As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” a company spokesman said. “Tesla is continuing to grow and hire new employees around the world.” Tesla says it plans on filling a “vast majority” of the vacancies with new hires.

(More Tesla trouble as electric semi-truck delayed again to focus on Model 3 problems. For more, Click Here.)

Tesla claims most of the employees let go were in sales and administration, and that the firings will have little effect on the roughly 10,000-strong factory workforce in Fremont, where turnover is high, according to employees and organizers working with the United Auto Workers, which is attempting to establish a foothold.

Tesla fired hundreds of employees as the company struggled with production issues on the Model 3.

The dismissal of union supporters would be illegal and would undoubtedly draw unfair labor practices complaints from the UAW.

Tesla founder Elon Musk has acknowledged the launch the Tesla Model 3 from the Fremont plants has fallen behind schedule. The company said in a Securities and Exchange Commission filing on Oct. 2 that “a handful” of its “manufacturing subsystems” have “taken longer to activate than expected.”

(Click Here for more on a series of recent setbacks for Tesla.)

The Model 3 is Tesla’s most affordable car, out the door. More than half a million people are currently on the waiting list for the Model 3, which starts at $35,000.

Musk also has delayed the introduction of self-driving semi-truck to November to focus on getting Model 3 ready for delivery to waiting customers.

Tesla’s goal is expand production of Model 3 quickly, according Musk, who this summer had predicted the company would be making 5,000 cars per week by the end of the year. The goal appears to be in unobtainable given problem now facing the company.

(Investors hammer Tesla as Model 3 production hits “bottlenecks.” For the story, Click Here.)

Musk admitted on Oct. 6, the company was facing “bottlenecks” in Model 3 production. He said Tesla was “diverting resources” to clear up the Model 3 production challenges, which was one factor in the company’s decision to delay its reveal of an electric semi-truck by about three weeks.

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