Connect with us

News

Cruise announces staff reduction efforts that affect 24% of employees

Credit: Cruise

Published

on

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. 

Advertisement

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. 

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. 

Advertisement

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:

Advertisement

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.  

Advertisement

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.  

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.  

Advertisement

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.  

Advertisement

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. 

Advertisement

Mo 

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

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.

Advertisement
Comments

Elon Musk

Tesla finally clarifies fatal Texas crash, confirms driver manually overrode acceleration

Published

on

Credit: CNBC

Tesla has finally clarified the situation regarding the viral crash in Texas where a Model 3 slammed into a home.

CEO Elon Musk replied to reports on Monday that stated the crash was due to the company’s Full Self-Driving or Autopilot suite, which seemed unlikely to those who are familiar with it. Video showed the car slamming into a house at an excessive rate of speed, making it highly unlikely the crash was due to the suite’s operation, as it does not travel at those speeds in residential areas.

Musk said:

“This makes no sense. FSD drives slowly through neighborhood streets, and this was a high-speed crash!”

Tesla’s Head of AI, Ashok Elluswamy, added context, revealing that the company’s data shows the driver “manually overrode self-driving by pressing the accelerator all the way to 100%.”

He revealed the speed reached by the car was 73 MPH, and the accelerator was still pressed “even after the crash.”

Authorities are reportedly investigating “whether Tesla’s Autopilot system played a role after a Model 3 left the roadway…slammed through a brick house at high speed and fatally struck Matha Avila as she sat inside,” the New York Post reported.

The National Highway Traffic Safety Administration (NHTSA) is now investigating the crash. Tesla will work with the agency to provide them with whatever information they need in order to clarify the cause of the crash.

Similarly, Tesla had claims of a fatal accident in Harris County, Texas, a few years ago. Early reports indicated that Full Self-Driving was the cause of the crash. After the National Transportation Safety Board (NTSB) worked with Tesla, the agency proved there was “no use of the Autopilot system at any time during this ownership period of the vehicle, including the time frame up to the last transmitted timestamp on April 17, 2021.”

Tesla alleged “driverless” crash in Texas: What is known so far

“Application of the accelerator pedal was found to be as high as 98.8 percent,” the NTSB said in their findings. The highest recorded speed in the five seconds leading up to the impact was 67 miles per hour. The area where the crash occurred is residential, and Texas State laws have default speed limits of 30 MPH in residential streets.

This appears to be a similar situation. However, an investigation will prove what happened for sure.

Continue Reading

Investor's Corner

SpaceX makes $20 billion move to optimize its balance sheet

Published

on

Credit: SpaceX

SpaceX announced today that it commenced its first-ever public bond offering, marking a significant step in the newly public company’s capital markets strategy.

The company announced an offering of senior unsecured notes expected to raise at least $20 billion.

The move comes just a short time after SpaceX completed one of the largest initial public offerings in history. In mid-June, the company priced shares at $135 and raised more than $85 billion, propelling founder Elon Musk’s net worth past the trillion-dollar mark and giving the firm substantial liquidity.

According to the company’s SEC filing, the net proceeds from the notes will be used primarily to repay in full the outstanding borrowings under its existing bridge loan facility, cover related fees and expenses, and fund general corporate purposes. The offering is being conducted under Rule 144A, as well as Regulation S, targeting qualified institutional buyers and non-U.S. investors. Notes will be unsecured obligations ranking equally with other unsubordinated debt.

The $20 billion bridge loan was used to refinance approximately $17.5 billion in higher-cost “junk” debt tied to X and xAI. SpaceX had merged with xAI in February 2026 in an all-stock deal. The bridge facility, which matures in September 2027, had represented the bulk of SpaceX’s long-term debt.

SpaceX officially acquires xAI, merging rockets with AI expertise

In connection with the bond launch, SpaceX disclosed it held approximately $100.8 billion in cash and cash equivalents as of June 19. Investor calls began on the announcement date, with pricing and launch expected shortly thereafter. Rating agencies have assigned investment-grade ratings to the proposed bonds, reflecting confidence in SpaceX’s dominant position in commercial launches and the growth trajectory of its Starlink internet offering.

The debt raise also allows SpaceX to optimize its balance sheet by replacing short-term, higher-cost bridge financing with longer-date, lower-cost fixed-income securities. This provides greater financial flexibility to support capital-intensive initiatives, including the development of Starship, the expansion of the Starlink constellation, and the integration of AI capabilities following the xAI combination.

SpaceX shares (NASDAQ: SPCX) fell sharply on the news, dropping over 16 percent overall on the market on Monday. The stock had surged initially after debuting but pulled back amid profit-taking and broader market dynamics.

Overall, the bond offering underscores SpaceX’s transition to a mature public company with access to diverse funding sources. It positions the firm to pursue its long-term vision of multiplanetary expansion and AI infrastructure, while maintaining a disciplined approach to its capital structure in a high-growth but capital-heavy industry.

Continue Reading

Elon Musk

SpaceX confirms third massive compute deal at Colossus data center

Published

on

Credit: xAI Memphis

SpaceX confirmed today that it has officially signed its third massive compute deal, providing compute at its Colossus data center in Southaven, Mississippi.

Reflection AI will gain immediate access to NVIDIA GB300 chips at SpaceX’s Colossus 2 data center. In return, Reflection will pay SpaceX $150 million per month starting on July 1, with total payments reaching approximately $6.3 billion if the contract runs through its duration, which is until 2029. Either party can terminate the agreement with 90 days’ notice after the initial three-month period.

CNBC first reported the deal.

This latest partnership highlights SpaceX’s strategy of commercializing its massive Colossus supercomputing infrastructure, originally developed to power Elon Musk’s Grok AI models. The company has rapidly expanded its customer base in the AI sector following its February 2026 merger with xAI, a transaction that valued the combined entity at $1.25 trillion.

SpaceX has previously signed significant compute deals with other major players.

It granted Anthropic exclusive access to the full capacity of its Colossus 1 data center, which exceeds 300 megawatts and includes over 220,000 NVIDIA GPUs. Details from SpaceX’s IPO filings indicate Anthropic will pay $1.25 billion per month through May 2029, potentially generating around $45 billion over the term of the deal.

Additionally, Google agreed to pay SpaceX $920 million per month for compute capacity from October 2026 through June 2029. This 32-month period will provide Google access to roughly 110,000 NVIDIA GPUs, along with supporting processors and memory. Capacity ramps up through September at a reduced fee, with termination options after the first year.

SpaceXA also established arrangements for computing power with Cursor, an AI coding startup. SpaceX acquired them in a $60 billion all-stock deal.

SpaceX makes first acquisition post-IPO

These arrangements position SpaceX’s collective position as an AI infrastructure powerhouse with high-margin revenue potential. The Google deal alone could generate nearly $29.5 billion over its term, while the Reflection contract adds another $6.3 billion.

Combined with the Anthropic arrangement, SpaceX stands to realize tens of billions in revenue from compute leasing in the coming years, which diversifies beyond SpaceX’s traditional rocket launches and Starlink operation.

The deals underscore growing demand for advanced AI training and inference capacity amid chip shortages and surging model development needs. Reflection, valued at $25 billion and focused on “American open intelligence” with government and national security ties, cited recent restrictions on closed models as validation for open-source approaches.

For SpaceX, the partnerships transform capital-intensive data centers into flexible revenue sources while supporting its broader AI ambitions after the company has gone public.

Continue Reading