US-based Tesla (NASDAQ:TSLA) Inc. is closing one of its Silicon Valley offices and laying off about 200 employees, knowledgeable sources told The Wall Street Journal.

The company told employees that it will close the San Mateo office, which was focused on improving its Autopilot driver assistance system, and lay off more than half of the office’s employees (about 200 people). The layoffs include both hourly and regular salaried employees. Meanwhile, the remaining office workers may move to other parts of the company.

According to the belief of one of the WSJ sources, the positions of the laid-off employees may be created in other locations with lower pay.

Earlier, Tesla CEO Ilon Musk said that the company plans to cut 10% of its employees amid concerns about the situation in the global economy. Musk clarified that the layoffs will not affect workers in the production of electric cars and batteries, as well as solar panels. In addition, he noted that the number of hourly workers may increase.