Using millions of task assignments from salon management software, I find significant establishment-level dispersion in labor productivity and internal task specialization and a strong association between the two that is largely unexplained by establishment size. The 25% most specialized salon-quarters are on average 60% more productive than the bottom 25%. To rationalize these facts, I identify and estimate a model in which firms characterized by different organization costs hire and assign tasks to workers with multidimensional skills in order to improve quality in an oligopolistic product market. I show that internal reorganization changes the partial and industry equilibrium effects of economic shocks. Neglecting task reassignment within the firm can therefore cause a researcher to misstate or reverse the aggregate productivity and specialization impacts of economic shocks.