May 21, 2018—Tesla chief executive officer Elon Musk recently announced that the auto manufacturer is in the process of “flattening” its management structure during its reorganization. The announcement comes after Tesla’s engineering chief took a leave of absence and another senior executive left the company.
Part of the reason for the May 14 announcement is the fact the Silicon Valley automaker has struggled to boost production of its Model 3 sedan during its recent organizational upheaval, according to a report by The Wall Street Journal.
Musk made the announcement following news that his engineering chief, Doug Field, was taking a leave of absence, and that senior executive Matthew Schwall was leaving the company for Alphabet Inc.’s driverless division, Waymo. Essentially, Tesla is now aiming to streamline its operations, as it continues to churn through capital and seeks to increase production of the Model 3.
In a memo to employees, Musk noted that the initiative to flatten the management structure is meant to improve communication and efficiency of operations. Musk added, however, that his company will continue to hire in the foreseeable future.
During a recent first-quarter earnings call, Musk noted that “the number of sort of third-party contracting companies that we’re using has really gotten out of control, so we’re going to scrub the barnacles on that front,” according to fortune.com.