Musk Memo Says Tesla in Process of a ‘Thorough Reorganization’

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.

 

[engle]

By now I imagine Tesla is bloated with so many employees so it makes sense to trim the managerial fat.

However, I think the timing of EM's email that he knew would be "leaked" was intentional. He's responding to the Street which has expressed concerns about the number of high-level departures recently.

 

[Barklikeadog]

Change Tesla to Venezuela
Change company to country
Change Musk to Maduro

Aha, it is plagiarism!

 

[whitex]

Two ways to achieve profitability (which Elon committed to investors by end of this year). Increase profit or cut spending.

 

[jelloslug]

Two ways to achieve profitability (which Elon committed to investors by end of this year). Increase profit or cut spending.

 

[Peter Thomas]

Seems like alot of noise to me.
Instead of just criticizing Elon and Tesla, how about offering some constructive criticism that is helpful instead of just shouts of criticism which have no real relevance to what is really important here . I believe that TSLA stock is undervalued compared to AMZN if you simply look at multiples of revenue. AMZN was barely profitable for the first 15 years of its existence. The Tesla production rate will be more exponential then linear and more innovations are on the way once Elon and the Tesla team works through the production issues, cut expenses to reduce burn rate and make sure they continuously improve quality as they get feedback on the early Model 3s that might have issues. Interesting that Warren Buffet missed Amazon. Why did Warren also miss Tesla, instead buying BYD?

Tesla is not just a car company but an investment in the world's future. We need to be investing in EVs, solar power, batteries and other technology that Tesla is developing so we can reduce the 14.8 Terawatts of fossil fuels burned each year, 60% of which is lost as waste heat which is rejected into the atmosphere along with 25.8 Giga Tons of CO2/yr (1) which is also released into the atmosphere so that earth does not turn into a Venus like planet. Some of the benefits of the technology developed by Tesla is synergistic with Space X in developing rockets and space ships to visit, settle and work on terraforming Mars and eventually visit new star systems to meet new life forms. Most importantly, we need to focus on making sure AI is no longer used to fight Cold Grey financial wars but instead is used to help us address the most important world needs. I hope the world leaders understand how important this is. Please lets come together and all work to make the world a better place. We all live on the same planet. Lets please try to help one another. Just my 2 cents.

reference (1): http://www.sandia.gov/~jytsao/Solar FAQs.pdf



Peter

Disclosure: I am a retail investor who owns 80 shares of TSLA because I believe it is the right thing to do.

 

[AmpedRealtor]

Like the email from a few weeks ago, this memo describes problems that all occurred under Musk's watch, and with his approval and knowledge. When he describes the contracting situation as being "barnacles on barnacles", that didn't just happen. He allowed it to occur. All of the revelations in this memo, and the email that preceded it, are evidence of Musk's own mismanagement. The steep cash burn was just fine by Musk until recently, now he's acting like it's a big revelation and something he needs to fix.

Musk created these problems in the first place. He should not be praised for correcting problems of his own making.

 

[jelloslug]

Like the email from a few weeks ago, this memo describes problems that all occurred under Musk's watch, and with his approval and knowledge. When he describes the contracting situation as being "barnacles on barnacles", that didn't just happen. He allowed it to occur. All of the revelations in this memo, and the email that preceded it, are evidence of Musk's own mismanagement. The steep cash burn was just fine by Musk until recently, now he's acting like it's a big revelation and something he needs to fix.

Musk created these problems in the first place. He should not be praised for correcting problems of his own making.

So by your assessment, it's a bad thing to correct the errors?

 

[Super_Popular]

Cutting spending = selling not so pretty CPO cars.

 

[Barklikeadog]

So by your assessment, it's a bad thing to correct the errors?

Really? How newsmax of you to pick it apart like that.
Even the die hards here will admit that Musk is the cause of many problems along the way. And I know you will turn around
and attack me as if I'm saying that all he does is cause problems. Far from it. For all of the great things Tesla has done, it also has a mountain
of problems, mistakes, etc. Hell, it took a couple years for him to admit that they 'overengineered' the Model X. That is a real
bullsh!tter way of saying 'we really screwed up'... but he just can't admit it.

The buck has to stop somewhere.
The problems, barnacles, etc are attributable to the micro managing leader grand poobah.

It would be nice if he said: -I've- made some mistakes and poor decisions along the way, it is my responsibility to acknowledge that, and to clean them up. I am still new to manufacturing on this scale, and every mistake is an opportunity to learn.

There, done. So easy.

I don't want him or the company to fail, I'd prefer they succeed. Just act professionally, don't promote or sell things you can't deliver, and actually try to turn a profit.

Where does the buck stop when it comes to the mistakes?

 

[Zungster]

Seems like alot of noise to me.
Instead of just criticizing Elon and Tesla, how about offering some constructive criticism that is helpful instead of just shouts of criticism which have no real relevance to what is really important here . I believe that TSLA stock is undervalued compared to AMZN if you simply look at multiples of revenue. AMZN was barely profitable for the first 15 years of its existence. The Tesla production rate will be more exponential then linear and more innovations are on the way once Elon and the Tesla team works through the production issues, cut expenses to reduce burn rate and make sure they continuously improve quality as they get feedback on the early Model 3s that might have issues. Interesting that Warren Buffet missed Amazon. Why did Warren also miss Tesla, instead buying BYD?

Tesla is not just a car company but an investment in the world's future. We need to be investing in EVs, solar power, batteries and other technology that Tesla is developing so we can reduce the 14.8 Terawatts of fossil fuels burned each year, 60% of which is lost as waste heat which is rejected into the atmosphere along with 25.8 Giga Tons of CO2/yr (1) which is also released into the atmosphere so that earth does not turn into a Venus like planet. Some of the benefits of the technology developed by Tesla is synergistic with Space X in developing rockets and space ships to visit, settle and work on terraforming Mars and eventually visit new star systems to meet new life forms. Most importantly, we need to focus on making sure AI is no longer used to fight Cold Grey financial wars but instead is used to help us address the most important world needs. I hope the world leaders understand how important this is. Please lets come together and all work to make the world a better place. We all live on the same planet. Lets please try to help one another. Just my 2 cents.

reference (1): http://www.sandia.gov/~jytsao/Solar FAQs.pdf



Peter

Disclosure: I am a retail investor who owns 80 shares of TSLA because I believe it is the right thing to do.

That's the problem man. Too many people are just out to make a quick buck. Can you imagine the amount of Pro ICE pro Oil powers out there that want this company to fail? Elon and Tesla have instigated one of the largest and most significant paradigm shifts in human history...

 

[jelloslug]

Really? How newsmax of you to pick it apart like that.
Even the die hards here will admit that Musk is the cause of many problems along the way. And I know you will turn around
and attack me as if I'm saying that all he does is cause problems. Far from it. For all of the great things Tesla has done, it also has a mountain
of problems, mistakes, etc. Hell, it took a couple years for him to admit that they 'overengineered' the Model X. That is a real
bullsh!tter way of saying 'we really screwed up'... but he just can't admit it.

The buck has to stop somewhere.
The problems, barnacles, etc are attributable to the micro managing leader grand poobah.

It would be nice if he said: -I've- made some mistakes and poor decisions along the way, it is my responsibility to acknowledge that, and to clean them up. I am still new to manufacturing on this scale, and every mistake is an opportunity to learn.

There, done. So easy.

I don't want him or the company to fail, I'd prefer they succeed. Just act professionally, don't promote or sell things you can't deliver, and actually try to turn a profit.

Where does the buck stop when it comes to the mistakes?

So what exactly is your point?

 

[Barklikeadog]

So what exactly is your point?

Ahh, you are trolling us. No point then, just move on.

 

[adaptabl]

Seems like alot of noise to me.
Instead of just criticizing Elon and Tesla, how about offering some constructive criticism that is helpful instead of just shouts of criticism which have no real relevance to what is really important here . I believe that TSLA stock is undervalued compared to AMZN if you simply look at multiples of revenue. AMZN was barely profitable for the first 15 years of its existence. The Tesla production rate will be more exponential then linear and more innovations are on the way once Elon and the Tesla team works through the production issues, cut expenses to reduce burn rate and make sure they continuously improve quality as they get feedback on the early Model 3s that might have issues. Interesting that Warren Buffet missed Amazon. Why did Warren also miss Tesla, instead buying BYD?

Tesla is not just a car company but an investment in the world's future. We need to be investing in EVs, solar power, batteries and other technology that Tesla is developing so we can reduce the 14.8 Terawatts of fossil fuels burned each year, 60% of which is lost as waste heat which is rejected into the atmosphere along with 25.8 Giga Tons of CO2/yr (1) which is also released into the atmosphere so that earth does not turn into a Venus like planet. Some of the benefits of the technology developed by Tesla is synergistic with Space X in developing rockets and space ships to visit, settle and work on terraforming Mars and eventually visit new star systems to meet new life forms. Most importantly, we need to focus on making sure AI is no longer used to fight Cold Grey financial wars but instead is used to help us address the most important world needs. I hope the world leaders understand how important this is. Please lets come together and all work to make the world a better place. We all live on the same planet. Lets please try to help one another. Just my 2 cents.

reference (1): http://www.sandia.gov/~jytsao/Solar FAQs.pdf



Peter

Disclosure: I am a retail investor who owns 80 shares of TSLA because I believe it is the right thing to do.

Wow. I want to smoke whatever you are smoking. HAHAHA

Tesla is an industrial company competing in an area that has very tough competition. The bottom line is they have to make a profit or significant progress for stock values to increase. Environmental concern is important to a few but very few will put dollars into investing for the future without a financial return. The bottom line is dollars plan and simple.

Terraforming mars is just polluting mars.to make it what we want. I think we can address CO2 issues on earth far easier.

 

[jelloslug]

Ahh, you are trolling us. No point then, just move on.

That's what I though...

 

[alcibiades]

So by your assessment, it's a bad thing to correct the errors?

Either you truly were confused or you are making a bizarre argument via rhetorical question.

I don't praise my kids for picking up their socks they leave around the house. But that doesn't mean I think it is bad for them to pick the socks up.

 

[jelloslug]

Either you truly were confused or you are making a bizarre argument via rhetorical question.

I don't praise my kids for picking up their socks they leave around the house. But that doesn't mean I think it is bad for them to pick the socks up.

The original assessment I was responding to was a stretch at best. I was using his logic to continue the train of though.

 

[sandpiper]

Really? How newsmax of you to pick it apart like that.
Even the die hards here will admit that Musk is the cause of many problems along the way. And I know you will turn around
and attack me as if I'm saying that all he does is cause problems. Far from it. For all of the great things Tesla has done, it also has a mountain
of problems, mistakes, etc. Hell, it took a couple years for him to admit that they 'overengineered' the Model X. That is a real
bullsh!tter way of saying 'we really screwed up'... but he just can't admit it.

The buck has to stop somewhere.
The problems, barnacles, etc are attributable to the micro managing leader grand poobah.

It would be nice if he said: -I've- made some mistakes and poor decisions along the way, it is my responsibility to acknowledge that, and to clean them up. I am still new to manufacturing on this scale, and every mistake is an opportunity to learn.

There, done. So easy.

I don't want him or the company to fail, I'd prefer they succeed. Just act professionally, don't promote or sell things you can't deliver, and actually try to turn a profit.

Where does the buck stop when it comes to the mistakes?

I always get a kick out of people who like to crap on EM. To do what he's done you have to be borderline insane. Normal, well adjusted people simply do not undertake to completely upend two totally different well established industries and succeed, against wildly bad odds. And a person cannot be other than what they are.

Tesla is going through an adjustment. They've been pouring money into the business like mad to get up to speed as fast as humanly possible. That rapid buildup inevitably creates a lot of waste and inefficiency. It's not a mistake... it's the process. When you're hiring like mad, you WILL get a lot of duds. And there will be a lot of confusion. And people will be doing what people do - building empires, protecting their butts, screwing things up and then hiding their screwups. And in all of the chaos this sort of thing is rampant.

Now that Tesla is over the hump (and they are), they need to cut the deadwood and start to become more systematic. The timing is exactly right. And I believe they will succeed. Telsa will start to stabilize.

 

[Electroman]

I don't want him or the company to fail, I'd prefer they succeed.

I don't think you do.

Listen. Musk is the reason for everything Tesla is today - the good, the great and the bad. Good and great outweighs (by a huge margin) the bad. So your assertion that he created the problem is just plain silly. It is like saying, he is the reason for those landings that failed initially. Of course, if he hadn't started SpaceX, those landings would not have failed. If he had not been that successful with 'S' he would not have made that mistake in the 'X'.

So the only way for him or anyone not to have made that mistake is to not start Tesla and make it a successful company.

I don't want him or the company to fail, I'd prefer they succeed.

I will repeat it one more time - I don't think you do.

 

[Barklikeadog]

I always get a kick out of people who like to crap on EM. To do what he's done you have to be borderline insane. Normal, well adjusted people simply do not undertake to completely upend two totally different well established industries and succeed, against wildly bad odds. And a person cannot be other than what they are.

Tesla is going through an adjustment. They've been pouring money into the business like mad to get up to speed as fast as humanly possible. That rapid buildup inevitably creates a lot of waste and inefficiency. It's not a mistake... it's the process. When you're hiring like mad, you WILL get a lot of duds. And there will be a lot of confusion. And people will be doing what people do - building empires, protecting their butts, screwing things up and then hiding their screwups. And in all of the chaos this sort of thing is rampant.

Now that Tesla is over the hump (and they are), they need to cut the deadwood and start to become more systematic. The timing is exactly right. And I believe they will succeed. Telsa will start to stabilize.

I guess you conveniently skipped over the line 'all the great things Tesla has done'
but that is ok, pretty common around here. If you say Elon is God, you are part of the crew. If you say that
EM has done a lot of great things, but has screwed up a lot too, the 'lot of great things' part is completely ignored
and the internet attack is directed at the 'screwed up' portion as if the other doesn't exist.

Where does the buck stop, sandpiper? With "They"?