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Tesla slumps after announcing a restructuring plan (TSLA)
Markets Insider
Tesla will restructure in an effort to streamline it's business, CEO Elon Musk told employees Monday.
The shuffle comes in the wake of a management shakeup that has seen Tesla's chief engineer take a leave of absence and another high-ranking engineer head to competing Waymo.
Shares of Tesla slumped more than 2.6% Monday, falling back below the key $300 level Monday after CEO Elon Musk announced a plan to flatten the electric carmaker's organizational structure.
The reorganization was announced via an internal memo from Musk, a Tesla spokesperson confirmed to Business Insider, and aims to "improve communication," while "combining functions" and "trimming activities that are not vital to the success" of Tesla's mission.
It's something Musk hinted at on the company's highly-unusual earnings call earlier this month when he said one would likely be required to achieve profitability this year. The announcement comes just days after a Wall Street Journal report late Friday said the company's head of engineering was taking leave of absence.
Doug Field, Tesla's senior vice president of engineering since 2014, is "taking some time off to recharge and spend time with his family" but has not left the company, a spokesperson told the paper. Field joined Tesla from Apple in 2013, according to his LinkedIn profile.
Field's absence is particularly significant considering he was one of just four executives listed on Tesla's last proxy statement, along with the chief financial officer, chief technology officer, and Musk himself. Musk has praised Field in the past, calling him "one of the world's most talented engineering execs" in a recent tweet.
Separately, Matthew Schwall, Tesla's director of field performance engineering, has departed the company for rival Waymo, which is owned by Google-parent Alphabet, the WSJ reported citing sources familiar with the decision.
Reorganization is likely to be a big focus of the company's upcoming shareholder meeting on June 5. Last week, an activist investor group representing union pensions wrote a letter urging shareholders to vote against the re-appointment of the head of Tesla's board as well as Elon's brother, Kimball.
Tesla remains the most popular stock on Wall Street for short-sellers, investors betting its price will drop, a position it has held for two years. Short interest, a measure of bets that a stock will drop, sits at $11.75 billion, outpacing the next-most-shorted company, Apple, by more than $1 billion, according to data compiled by the financial-analytics firm S3 Partners.
Last week, Musk bought $10 million worth of Tesla shares just two days after warning short-sellers of "carnage" on Twitter.
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