Musk says ‘thorough reorganization’ under way at Tesla

WASHINGTON — Tesla, Inc. chief Elon Musk told employees on Monday the company was undergoing a “thorough reorganization” as it contends with production problems, senior staff departures and recent crashes involving its electric cars.

In his e-mail to staff, Mr. Musk said Tesla was “flattening the management structure to improve communication,” combining functions and trimming activities “not vital to the success of our mission” in the reorganization.

The company confirmed the contents of the e-mail, which was first reported on by the Wall Street Journal.

Tesla is at a critical juncture as it tries to fix an inauspicious launch of the Model 3 sedan, a mid-market car crucial to its success and future profitability that has been plagued by early production problems.

Tesla shares fell 3% to close at $291.97 on Monday.

Amid the manufacturing problems, senior Tesla executives have departed or cut back work. Waymo, Alphabet, Inc.’s self-driving unit, said on Sunday that Matthew Schwall had joined from Tesla, where he was its main technical contact with US safety investigators.

Last week, Tesla said Doug Field, senior vice president of engineering, was taking time off to recharge.

The company is developing multiple new vehicles, including a semi truck, and has registered a new car firm in Shanghai in a likely step toward production in China. On a May 2 earnings call, Mr. Musk said Tesla would conduct “a reorganization restructuring” this month, without providing more details.

He added that he would reduce the number of third-party contracting companies engaged by Tesla, equating them with “barnacles” needing to be scrubbed off.

Tesla will still rapidly hire people to fill critical positions “to support the Model 3 production ramp and future product development,” Mr. Musk said in Monday’s e-mail. —