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A memo sent to Tesla employees Monday lays out a plan to “flatten” its management structure in an effort to improve communication and efficiency.
The full memo obtained by CNBC says:
To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company. 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.
To be clear, we will continue to hire rapidly in critical hourly and salaried positions to support the Model 3 production ramp and future product development.
Musk mentioned plans for some sort of reorganization during the company’s most recent earnings call that would contribute to the company’s efforts for profitability. He said the reorganization would mostly impact third-party contractors. “We’ve got barnacles on barnacles,” he said. However, the latest memo seems to indicate there will be a more significant round of layoffs.
Musk has also mentioned that cost-cutting measures include a more thorough review of expenditures. He said the plan is to “cut everything that doesn’t have a strong value justification,” and any expenditure above $1 million for the next year must be personally approved by him.