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Cruise announces staff reduction efforts that affect 24% of employees

Credit: Cruise

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Recently, reports emerged stating that General Motors’ self-driving unit, Cruise LLC, was dismissing nine top executives amid an ongoing probe. A memo from Cruise President Mo Elshenawy, which was shared by the self-driving unit online, shows that the nine executives were but the tip of the iceberg in the company’s efforts to strategize its operations. 

Cruise has had a very eventful year. In August, Cruise received approval to deploy its self-driving robotaxis 24/7 in San Francisco. Following an incident when one of the company’s self-driving robotaxis crashed into a firetruck, however, the California Department of Motor Vehicles (DMV) advised Cruise to cut its fleet in the city by 50%. 

Things took a turn for the worse in October when a pedestrian, a woman, was initially struck by a human-driven car. The impact was so notable that the woman was thrown into the path of a Cruise robotaxi, which ended up running over the pedestrian. The Cruise robotaxi detected a collision and proceeded to pull over, dragging the woman about 20 feet further. The pedestrian was taken to SF General Hospital with serious injuries. 

By late October, the California DMV advised Cruise to halt all its operations in San Francisco. Since then, Cruise has implemented a number of changes. Leaders such as former Chief Executive Officer (CEO) Kyle Vogt and Chief Product Officer Daniel Kan also left the company. 

In his memo, Cruise President Mo Elshenawy noted that the company has now updated its operating plans. These updates include a workforce reduction that affects about 24% of the company’s staff. Bloomberg News estimated that Cruise’s workforce reduction efforts would likely affect about 900 full-time workers. Most of the ones affected will be from operations, though some technology positions will also be affected. Engineers, however, will mostly be safe. 

Following is Elshenawy’s memo to Cruise staff, as shared by the GM self-driving unit in its official blog. The document covers the company’s decision behind its workforce reduction, as well as what those affected by the update could expect in the coming months. 

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In October, Cruise paused operations to take time to examine our processes, systems and tools and improve how we operate. While we remain committed to commercialization, we will approach it within a thoughtful and achievable time frame—with safety as our north star. 

As a result of our updated operating plans, today Cruise shared the difficult news that we are making staff reductions impacting 24% of full-time Cruisers. This reflects our new future and a more deliberate go-to-market path, meaning less immediate need for field, commercial operations and corporate staffing. 

As we look forward, the road to successful commercialization is dependent on defining and meeting an exceptional performance and heightened safety bar. Cruise is committed to playing a key role in defining these standards with the input of our regulators, our communities and other AV industry leaders.

We are extremely grateful to the departing employees who have helped further our mission, and the remaining Cruisers who will carry that mission forward in our next chapter.  

Below is a letter from Mo Elshenawy, President and CTO of Cruise, that went to all employees today:

Cruisers:

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We knew this day was coming, but that does not make it any less difficult—especially for those whose jobs are affected.  

Today, we are making staff reductions that will affect 24% of full-time Cruisers, through no fault of their own. We are simplifying and focusing our efforts to return with an exceptional service in one city to start with and focusing on the Bolt platform for this first step before we scale. As a result, we are reducing our employee counts in operations and other areas. These impacts are largely outside of engineering, although some Tech positions are impacted also. As you might have learned, yesterday, we took action to part ways with several SLT members.  

Craig and I believe this is a necessary step, and our leadership team and the board are fully aligned with how our go-forward U.S. staffing needs will map to the priorities ahead of us, and set up Cruise for the long term. We have also ended additional assignments of contingent workers who support our driverless operations, as we refined our go forward plans.  

In a few moments, you will receive an email letting you know whether or not you are affected by this staffing reduction. If you are impacted, you will get details about what happens next in a subsequent email.  

Please know that our first priority is to treat departing Cruisers with fairness, and I will describe more about how we are doing that below.  

I also want to explain why we are making these reductions, and what this means for Cruise moving forward.  

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Cruise today vs Cruise moving forward 

As we’ve shared, our goal is to focus our work on a fully driverless L4 service that meets a new AV performance bar, prioritize the Bolt platform, relaunch ridehail in one city to start, and enhance our safety standards and processes before we scale. We are ceasing work on the Origin MY24 but not losing sight of our work on future programs. This is very different from our prior plans to expand into more than a dozen new cities in 2024.  

As a result of our decision to slow down commercialization, we are restructuring to focus on delivering the improvements to our tech and vehicle performance that will build trust in our AVs.  

Many of you will be impacted because we aren’t commercializing as quickly, and therefore don’t need support in certain cities or facilities. In other cases, we restructured teams based on the work we’re prioritizing. We didn’t take any of these decisions lightly, though I know that isn’t much of a consolation if you’re someone affected by the actions we are taking today.  

How we’re helping departing employees 

We know there’s no “good” way to lay off employees, but treating people fairly on their way out was a key principle that guided our approach, and our top priority was determining how we could provide a strong severance package, while treating departing Cruisers with respect. In short, we are offering departing Cruisers pay, at minimum, through April 8, 2024 (approximately 16 weeks), plus continued subsidized health benefits, RSU vesting, the January 5 bonus, and additional immigration support for those holding work visas.  

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Severance details include:  

  • Severance pay: Departing employees will remain on payroll through Feb. 12 and are eligible for an additional 8 weeks of pay, with long-term employees offered an additional 2 weeks’ pay per every year at Cruise over 3 years.  
  • Bonus: All impacted employees will receive their 2023 bonus (eligible target payout) on Jan. 5, 2024. 
  • Medical, Dental, Vision: we will provide Cruisers and their dependents who are currently enrolled in Cruise benefits the option to receive Cruise-subsidized medical, dental and mental health/EAP benefits through the end of May.  
  • Perks Wallet: We will give Cruisers two months to access the perks most important to them via our Perks Wallet.  
  • 401(k): We will give Cruisers two months to continue contributions into their 401(k) plan, including our employer match.  
  • RSU vesting: All Cruisers, including those impacted and those remaining, will receive their January 15th RSU vest. In addition, we will provide liquidity for all of these January 15th shares in Q1 based on an updated 409A fair market valuation that we will conduct in the first quarter. Tax obligations for these January 15th vested shares will not be incurred until we provide you liquidity for these shares.
  • Career support: Departing employees will receive a year-long subscription to LinkedIn Premium, and we will create an opt-in alumni directory to connect potential employers with impacted Cruisers. Cruise Talent Acquisition will also run workshops on resume building, networking, and interview prep with departed Cruisers in the new year. 
  • Immigration support: We are offering continued time on payroll through March 24 in lieu of a lump-sum severance payment to allow visa holders additional time to help transition and manage their immigration status. Eligibility for the Perks Wallet and 401(k) contributions and match will also continue through this time. We also have dedicated support lined up to help Cruisers based on their needs.  

Our message to other employers in the market is that each departing Cruiser is a talented, driven, and mission-focused team member who will contribute and achieve great things elsewhere. They are departing us through no fault of their own. Other companies will be privileged to have these professionals on their teams, as we were privileged to have them here during their time at Cruise.  

What’s next 

As mentioned, in a few moments, you will receive an email letting you know whether or not you are affected by this staffing reduction, and if you are impacted, you will get details about what happens next. I am so sorry we have to do this by email, as I would prefer that we have a conversation with each of you. Unfortunately, given the scale of this change, this approach allows us to communicate to those who are impacted at the same time. We know you will want to say goodbye to your colleagues, so you will have access to Cruise email and Zoom for the next couple of hours (until 10am PT).  

This is one of the hardest days we’ve had so far because so many talented people are leaving. I’m thankful we had the chance to work together, and I know I speak on behalf of so many Cruisers who will be reaching out to those departing to help with our professional networks and references. On behalf of the SLT, the Cruise Board and GM, I’m truly grateful to everyone who has played a role in building Cruise and who has poured so much into the promise of making our roads safer and our world better. 

Mo 

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

SpaceX delivers blockbuster Q3 results as Super Intelligence segment booms

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Credit: SpaceX

SpaceX reported its third-quarter 2026 financial results on October 20, posting the company’s first solidly profitable quarter since going public earlier in the year under the ticker $SPCX.

Revenue reached $14.58 billion, up 161 percent year-over-year from $5.6 billion, and well ahead of consensus estimates in the $12.7 to $12.9 billion range. The results highlight a rapid shift in SpaceX’s center of gravity toward artificial intelligence/super intelligence, while Starlink and traditional space operations continue to show robust progress.

Here are the key financial results for the quarter:

  • Revenue of $14.58 billion (+161% YoY)
  • Adjusted EBITDA of $8.8 billion (+306% YoY)
  • GAAP net income of $4.4 billion (versus a $1.1 billion net loss in the prior-year quarter)
  • Adjusted EPS of approximately $0.35 (versus roughly $0.13–0.16 expected)
  • Income from operations of $2.8 billion

The AI/SI segment generated $7.56 billion in revenue, an 830 percent year-over-year increase, making it the company’s largest segment for the first time. Growth was primarily driven by the activation of major cloud services agreements, the integration of Cursor (acquired earlier in 2026), and rising usage of Grok models and the newly introduced Grok Bot personal agent.

SI adjusted EBITDA reached $5 billion, and nameplate compute capacity stood at 1.7 GW at quarter-end, up from 1.4 GW in June and 0.6 GW a year earlier. Capital expenditures totaled $19.6 billion, with the majority allocated to AI infrastructure, including continued expansion of the Colossus facilities.

The Connectivity segment, which primarily surrounds Starlink, produced $5.25 billion in revenue, a 69 percent year-over-year and 22 percent sequentially. These are pleasant results to see and expected, considering how many airlines have adopted Starlink over the past year.

Starlink consumer subscribers reached 13.6 million, an 89 percent increase from the prior year, and a sequential gain of 1.6 million. Consumer average revenue per user improved to $69. Meanwhile, Enterprise and Government revenue also grew strongly, and Starlink is now installed on more than 3,800 aircraft, making internet more accessible and better performing than previous options.

The Space segment also performed well and contributed $1.77 billion in revenue, up 6 percent year-over-year and 84 percent sequentially. A major milestone was the successful first revenue-generating Starship mission (Flight 14), which deployed 26 V3 Starlink satellites. Those satellites added roughly 10 times the downlink capacity of a typical Falcon 9 Starlink launch.

SpaceX completed 12 customer launches during the quarter, including NASA’s Nancy Grace Roman Space Telescope mission, and continued to grow its backlog of crewed, national security, and commercial flights.

CFO commentary noted that the combination of launch leadership, recurring Starlink revenue, and rapid SI expansion is producing meaningful operating leverage.

The company ended the quarter with roughly $90 billion in cash and marketable securities, providing substantial resources for ongoing investment while targeting an investment-grade balance sheet. Sequential revenue nearly doubled from the $7.81 billion reported in the second quarter, illustrating the pace of the AI-driven acceleration. Things are looking strong for SpaceX.

What’s incredibly striking is the fact that SI has grown to be larger than the rest of the company in such a short amount of time. CEO Elon Musk said on the earnings call that Grok Bot is the “fastest-growing product I’ve ever seen,” so it seems that it could be a true keystone of SpaceXSI over the next few years.

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Investor's Corner

SpaceX reports its second earnings today: here’s what to expect

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Credit: SpaceX

SpaceX (NASDAQ: SPCX) will report its second public earnings call today since its IPO earlier this year, and there are a few things we expect to hear about, as well as Wall Street analysts, who have already outlined their expectations for the call.

Wall Street analysts have a consensus of $12.72 billion in revenue and an earnings per share (EPS) of $0.13. These are broken down into three sectors: Space, Connectivity, and AI/SI, which are perceived in this way:

  • Space: $1.41 billion
  • Connectivity: $4.84 billion
  • AI/SI: $6.47 billion

Other outlets cluster near $12.8 or $12.9 billion in revenue and $0.14 – $0.15 EPS. This implies a roughly 65 percent sequential growth from Q2’s $7.81 billion, driven mostly by AI/SI, with the first post-IPO positive EPS expected.

SpaceX just launched its secret Starfall saucer again

Here are the three things to watch for on the call:

AI Revenue Ramp and the $100B+ ARR target

AI is truly the swing factor for SpaceX, and analysts expect it to roughly double from Q2’s $2.56 billion and become about half of total revenue. Management previously guided to a $100 billion+ annualized run rate by December, including the Cursor acquisition, which was $60 billion, to close the quarter.

SpaceX makes first acquisition post-IPO

Listen for updates on SpaceX’s compute capacity, especially pertaining to its contracts with Google, Anthropic, and others, revenue per watt, any new deals, and Cursor’s early contribution.

Starlink/Connectivity Metrics and Mobile Expansion

Connectivity remains a main profit engine for SpaceX. Subscriber additions will be something to pay attention to, as Q2 ended at 12 million and previews are looking at 14 million for this quarter. Additionally, ARPU trends, enterprise and government growth, and any commentary on Starlink Mobile will be something to pay attention to, especially following the recent low-band spectrum deal and FCC-related constellation approvals.

Capex Trajectory, Cash Burn/FCF, and Starship/Operational Updates

Q2 capex of roughly $18.4 billion weighed on the stock. Investors will look to scrutinize Q3 spending levels, any guidance on the pace into Q4/2027, free cash flow, backlog, and liquidity. Operational color on Starship (Flight 14 milestones and Flight 15 timing/reusability progress), Falcon cadence, and government/NASA contracts are also in focus.

Of course, there will also be some speculation on the potential Tesla-SpaceX merger, but there was nothing mentioned in the company’s proxy it sent earlier this week.

SpaceX will report earnings after market close today and will stream the call on X.

Interested in ordering a Tesla? Use my referral code for three free months of Full Self-Driving (Supervised) here

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SpaceX just launched its secret Starfall saucer again

SpaceX launched its Starfall capsule again on Bandwagon-5, this time listed openly beside rideshare customers.

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An artist’s illustration of a SpaceX Starfall capsule reentering Earth’s atmosphere. (Image: SpaceX)
An artist’s illustration of a SpaceX Starfall capsule reentering Earth’s atmosphere. (Image: SpaceX)

SpaceX launched its Starfall reentry capsule for the second time on Tuesday morning, flying it as the payload of the Bandwagon-5 rideshare mission. Falcon 9 lifted off from Space Launch Complex 40 in Florida at 7:04 a.m. ET with 32 payloads, and the first stage booster, on its 19th flight, landed on the droneship A Shortfall of Gravitas about nine minutes later.

Starfall was scheduled to separate last, 2 hours and 48 minutes after liftoff. The final customer satellite on SpaceX’s mission timeline comes off the upper stage about an hour and nine minutes in, which left a long gap before the capsule was due to be released alone. SpaceX later posted that the payload deployment sequence is complete. At liftoff, the company said Starfall “enables affordable, routine access to a microgravity environment, providing unique opportunities for on-orbit manufacturing, scientific research, and testing.”

As Teslarati reported before the first Starfall flight, SpaceX made no public announcement about the vehicle then, and nearly everything known came from FAA and FCC filings. This time Starfall is an item name on the official mission page, listed beside paying rideshare customers. SpaceX has still not said what, if anything, is aboard this Starfall, Spaceflight Now noted.

The FAA’s environmental assessment from May describes a disk about 10.2 feet wide and 2.5 feet tall that weighs roughly 4,600 pounds and can bring 2,200 pounds of payload back to Earth.

Interestingly, the same rocket also carries a competitor’s hardware. Varda Space Industries launched its W-Series 7 capsule on Bandwagon-5, a spacecraft about three times smaller than Starfall that will test whether microgravity can improve the solubility of a cancer drug called Protac. It is Varda’s ninth reentry capsule, and W-8 and W-9 launched earlier this month on Transporter-18. SpaceX has been Varda’s launch provider since the company’s first Falcon 9 rideshare contract in 2021.

SpaceX has not published where or how this Starfall will come down. The preview we ran in June described a recovery from the Pacific Ocean, and the company has not said whether this flight follows the same plan. The launch also arrives hours before SpaceX posts its third quarter results after the market closes, a report we previewed earlier this week.

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