Elon Musk reveals new details about how Tesla is restructuring

Bill Pugliano/ Getty ImagesTesla co-founder Elon Musk.
  • Tesla CEO Elon Musk sent an email to employees on Monday morning stating that the company is reorganising in an effort to flatten management structure and improve communication.
  • Musk originally said that Tesla was restructuring in the company’s first-quarter earnings call earlier this month.
  • Musk said in the memo that Tesla still plans to hire more people to help it ramp up its Model 3 production.

Tesla CEO Elon Musk said in a memo on Monday that the company is reorganising in an effort aimed at “flattening management.”

Musk hinted at a reorg in Tesla’s first-quarter earnings call in May, when he said that the company would be “restructuring” operations in an effort to meet its profitability goals. At the time, Musk didn’t share many details about what exactly the restructure would look like, but he suggested that third-party suppliers might be affected.

“The number of third-party contracting companies we’re using is out of control,” Musk said during the call. “We’re going to scrub the barnacles on that front. We’ve got barnacles on barnacles. So there’s going to be a lot of barnacle removal.”

Tesla aims to become profitable by the second half of the year, and Musk has said that the company does not plan on raising any capital before the end of 2019.

In a memo sent to employees on Monday at 1:08 AM PT, Musk shed more light on what the restructuring would look like.

“As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission,” Musk said in the memo, which was obtained by Jalopnik and confirmed by Tesla to Business Insider.

Musk also said that the company would continue to hire hourly and salaried positions for Model 3 production.

Tesla has struggled to ramp up Model 3 production since its launch last July. The company originally aimed to make 5,000 Model 3 vehicles a week in December, but it later revised its target to making 5,000 Model 3 cars by the end of the second quarter. Tesla said that the company was making 2,270 Model 3 vehicles per week in April.

News of Tesla’s restructuring comes after a Wall Street Journal report revealed that Doug Field, the company’s senior vice president of engineering is “taking some time off.” However, Tesla has said that he is not leaving the company.

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