The proposal, which has been in the works behind closed doors, would divide the school system into 32 so-called networks.
The teacher's union condemns the plan, saying it's a scheme toward privatization, in which schools compete for resources, leaving parents and students behind.
"Austin Beutner should be figuring out how he spends the record-breaking $1.86 billion in reserves on urgent student needs, instead of spending time with high-priced, unaccountable consultants plotting the downsizing of a district that serves all students," said UTLA President Alex Caputo-Pearl in a statement.
Beutner hasn't comment publicly. He is expected to make the plan public next month.
MORE: LAUSD Superintendent Austin Beutner marks 'Attendance Matters Day' with visits to students' homes