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Report: Tesla tells employees it will reorganize management structure

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Report: Tesla tells employees it will reorganize management structure

Tesla Inc. CEO Elon Musk told employees May 14 that the company plans to flatten and restructure its management and is undergoing a "thorough reorganization," The Wall Street Journal reported the same day, citing an internal company memo.

Musk reportedly said in the memo that the company is going through the reorganization process to make sure Tesla is "well prepared" for the future.

Under a flat organization structure, there are few or no levels of middle management between staff and executives.

As part of the reorganization, Tesla is "flattening" the management structure to "improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission," according to the memo, as reported by the Journal.

However, Musk wrote in the memo that Tesla will continue to hire employees.

The news comes after the recent departure of senior executive Matthew Schwall, who left the company for Alphabet Inc.'s driverless car division Waymo, the report said. Schwall was the carmaker's main technical contact with U.S. safety investigators.

Doug Field, Tesla's senior vice president of engineering, took a leave of absence May 11, the Journal previously reported, citing anonymous sources.

Tesla did not respond to S&P Global Market Intelligence's request for comment.

The company posted a $709.6 million loss for the first quarter. During the company's first-quarter earnings call, Musk said: "We are going to conduct sort of a reorganization, restructuring of the company in the — this month and make sure we're well set up to achieve that goal."

Earlier this month, Musk bought 33,000 shares in Tesla for about $9.85 million.

Electrek reported April 17 that the electric carmaker, which has been struggling with production issues relating to its Model 3 vehicle, will ramp up the model output to 6,000 units per week by the end of June to achieve its target of 5,000 units a week after accounting for a margin of error.