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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. 

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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. 

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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.  

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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.  

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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. 

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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.

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Investor's Corner

Lucid denies rumors of bankruptcy after over 40% stock drop

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Credit: Lucid

Electric vehicle maker Lucid Group has denied rumors of an imminent bankruptcy after a report from this morning sent the stock on a dramatic drop on Wall Street, seeing losses of more than 40 percent during trading hours.

Lucid’s Director of Communications, Nick Twork, responded to the report from Eletric-Vehicles.com, which stated the company’s restructuring advisor, AlixPartners, was asked to review two decisions: taking Lucid shares private or filing for Chapter 11 bankruptcy protection.

The report also claims AlixPartners told the Lucid board to “concentrate on Gravity production while improving its quality, and to temporarily hold back the Lucid Air, the sedan that has defined the company since its launch.”

Twork said:

Shares rebounded after the response to the report, halving its losses as the trading day neared 3 p.m. Eastern.

Lucid has struggled to get its sales off the ground and into more respectable numbers, but the company is in its early years, when things are hard to begin with. It is also backed by several notable investors, including the Saudi Public Investment Fund (PIF), which has nearly limitless money and likely would not ditch an investment of this size so soon.

Lucid shares were down just 14 percent at the time of publication, a far cry from the 55 percent its losses topped out at during the day.

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Tesla owner attempts resale of Model S Signature Edition for over $260k

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Credit: Tesla

A Tesla owner who purchased a Model S Signature Edition, one of the final 250 units of the all-electric flagship vehicle that the company discontinued earlier this year, is attempting to sell the car despite a no-resale clause that prohibits reselling for the first year.

The car is being sold by J&S Autohaus in Ewing, New Jersey, and is priced at $260,490, well above the $159,420 that Tesla sold it for earlier this year.

To those who do not know, the Model S Signature was a highly exclusive, limited-run farewell variant of the Model S Plaid that was produced this year to mark the end of production of both the Model S and Model X, Tesla’s two flagship vehicles.

Limited to just 250 units with invite-only sales, it serves as a collector’s item celebrating the legacy of the Model S, which helped pioneer Tesla’s electric vehicle success since its 2012 launch.

It bundles top-tier performance with bespoke cosmetic and luxury upgrades, plus Tesla’s Luxe Package. Here’s what the Model S Signature has over the typical Model S Plaid:

  • Exclusive Exterior – Unique Garnet Red Paint, matching door handles, gold Tesla “T” badges upfront, gold Plaid and Signature badging at the rear.
  • Premium Interior – White Alcantara upholstery with gold piping/accents, gold Plaid seat badges, Signature-marked door sills, individually numbered dashboard plaque, gold puddle lights, special interior lighting sequence, and a custom Signature key fob.
  • Performance Upgrades – Carbon-ceramic brakes with gold calipers
  • Bundled Luxe Package – Full Self-Driving (Supervised), four years of Premium Connectivity, free lifetime Supercharging
  • Performance Metrics – ~1,020 horsepower, sub-2-second 0-60 MPH, ~390-mile range

Tesla quickly introduced a No Resale Agreement for the Signature Editions of the Model S and Model X, which would penalize the seller for “the amount of $50,000 or the value received as consideration for the sale or transfer, whichever is greater.”

The company continues:

“If you sell or otherwise transfer the ownership of your Model S or Model X, the remainder of the Recommended Maintenance, Wheel and Tire Protection Plan, and Windshield Protection Plan will transfer automatically to the buyer. The Full Self-Driving (Supervised), Free Supercharging and Premium Connectivity will not transfer with the vehicle and will terminate once the ownership of the Model S or Model X is transferred.”

Tesla will likely come after the seller, especially as it has been about two months since Tesla launched deliveries.

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Tesla Full Self-Driving v14.3.5 Early Impressions: new features and early performance

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Credit: TESLARATI

Tesla rolled out Full Self-Driving (Supervised) v14.3.5 yesterday, and about fifty miles of driving on the new version has given me enough time to highlight what seems to be strong about the release and what is not.

Additionally, Tesla has added a few new features with this specific update, which we’ll highlight as well.

Tesla Full Self-Driving v14.3.5 Performance

The new update is business as usual. Things seem to be running completely normal and necessary, but there are a few things that we’ve seemed to pick up on based on our own experience with v14.3.5, as well as what other users are seeing.

Initially, it seems to be more aware of its surroundings, making moves that are incredibly courteous to other drives and operating just a tad more reserved than what the suite might have done previously.

We had two instances where it showed this, the first being FSD needing to pass a Flagger Force vehicle that was placing down signage for the day. Their work truck was right at the front corner of a right-hand turn; typically where most cars travel when they take that turn.

FSD v14.3.5 recognized this, slowed down, and took the turn wide with no issues:

Additionally, v14.3.5 backed up for a semi truck that was making a wide turn onto a road my car was on. This is not new, but it seemed to be backing up for courtesy; it didn’t seem completely necessary, but it might have put some peace of mind in the truck driver’s head:

X user Mike P, also a Pennsylvania native like myself, shared three clips of his Tesla running v14.3.5 performing similar maneuvers. He said:

“FSD turns right into a small alley that only fits one car at a time, sees oncoming car, reverses out of alley to make space, realizes oncoming car is actually parking, re-enters alley.”
Check it out here:

It seems like Speed Profiles are still in need of some tweaking; I am adjusting what Speed Profile I’m in frequently, constantly changing it to get it to travel at the correct speed. This was an issue for me on v14.3.4. It seems like they’re just a little inconsistent.

Terrible Parking

Parking attempts on v14.3.5 were not good. There are quite a few people who have said this:

David Moss, the Tesla owner who has taken multiple coast-to-coast drives without any interventions, also has had some issues with parking early on with v14.3.5:

New Features

Tesla has added the ability to open Camera Preview at any time. Previously, it was only available in Park. Here’s what that feature looks like in action:

Check back later this week for a longer review of what we’ve noticed on Full Self-Driving v14.3.5.

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