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Tesla just made some drastic changes to its workforce.

The Melodrama Archivesautomaker fired between 400 and 700 workers from its south Bay Area headquarters and production plant this week, the San Jose Mercuryfirst reported. The company claims the employees were fired for subpar job performance rather than laid off.

"Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period," a Tesla spokesperson said in a statement. "Performance reviews also occasionally result in employee departures."

The cuts come as the company continues to struggle with production delays and inefficiencies. The company had promised to create 1,500 of its new Model 3 cars earlier this month but only managed to deliver 260.

The Wall Street Journalreported this week that the cars that it did finish had to be assembled in part by hand because Tesla had not yet finished the machinery needed to design them. Tesla vehemently denied this report.

The company says the majority of the jobs cut were in administrative and sales positions, and the exodus won't have much impact on the roughly 10,000-strong factory workforce producing the Model 3.

Employees were given no advance notice ahead of the terminations, according to the Mercury. Tesla claims it plans to fill the majority of the vacated positions.

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