Tesla is looking forward to “flattening management.” Tesla CEO Elon Musk himself admitted that in a memo on Monday. He had already hinted at doing exactly this back in May when he mentioned that the company will be restructuring its operations so that it could meet its profitability goals. At that time, he had not mentioned what he exactly meant by that, but now it seems quite clear that the third-party suppliers might be affected.
The number of third-party contracting companies we’re using is out of control. 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. – Elon Musk
The restructuring is done to make the year’s second half more profitable. However, they are not planning on raising any capital before the end of 2019.
The Model 3 production was launched last July, but Tesla has struggled to ramp up its production. They had originally aimed to make 5,000 Model 3 vehicles a week in December, but they were able to manufacture 5,000 Model 3 by the end of the second quarter. They were making 2,270 Model 3 vehicles per week in April now.
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. – Elon Musk
Tesla has announced that they will continue to hire hourly and salaried positions for Model 3 production. The news surfaced when a Wall Street Journal revealed that Doug Field, the company’s senior vice president, would be taking some time off, but the company later revealed that he would not be leaving.