The company had 3,800 employees before Thursday’s cuts, which also followed a round of layoffs at Cruz last month. Affected employees will receive paychecks through February 12, plus at least eight additional weeks of pay, plus service-based severance pay.
“We shared the difficult news that we are reducing our workforce, primarily in business operations and related corporate functions,” a Cruise spokesperson said in a statement. “These changes reflect our decision to focus on more intentional marketing plans with safety as our north star.” “We support the affected cruisers with strong compensation and benefits packages and are grateful to the departing employees who played important roles in building Cruise and supporting our mission.”
A Cruise representative also told CNBC that the company’s goal now is to work on a fully driverless L4 service, as well as relaunch ride-hailing services in one city to start.
GM added: “GM supports the difficult hiring decisions made by Cruise as they reflect their intentional path forward, with safety as the north star. We are confident in the team and committed to supporting Cruise as they position the company for long-term success with a focus on trust, accountability and transparency.”
A raft of safety concerns and incidents have plagued Cruise, which is majority owned by General Motors, since it received approval last August to offer 24-hour robotaxi service in San Francisco.
Since the October accident, Cruise’s robotaxi fleet has been grounded, pending the results of an independent safety investigation; Its leadership has been destroyed. Production of new robotaxis halted; Hundreds of vehicles were recalled; Local and federal government officials have launched their own investigations, among other concerns.
In October, the California Department of Motor Vehicles suspended deployment and testing permits for Cruise’s self-driving vehicles, along with a statement that said: “When there is an unreasonable risk to public safety, the DMV can immediately suspend or revoke permits.” .
Cruise’s decision to suspend all public road trips last month came after a board meeting at company headquarters, after which it also announced a reorganization and more oversight from GM, an independent “safety expert” that will evaluate and expand the company’s safety operations. Cruise’s technology and safety systems were investigated by Exponent, the engineering consulting firm hired by Cruise to analyze the Oct. 2 accident. Exponent’s investigation is ongoing, according to Cruz.
Here’s the email Cruz sent to staff:
We knew this day would come, but that doesn’t make it any less difficult – especially for those whose jobs have been affected.
Today, we are making staff reductions that will impact 24% of our full-time cruisers, through no fault of their own. We are streamlining and focusing our efforts to return exceptional service in one city to begin with and focusing on the Bolt platform for this first step before expanding. As a result, we are reducing our headcount in operations and other areas. These impacts largely fall outside the scope of engineering, although some technical positions are also affected. As you know, yesterday we took action to part ways with several SLT members.
Craig and I believe this is a necessary step, and that our leadership team and Board are fully aligned on how we plan our U.S. staffing needs moving forward with the priorities that lie ahead, preparing Cruise for the long term. We have also terminated additional assignments for contingent workers supporting our driverless operations, as we refine our plans moving forward.
Within a few moments, you will receive an email letting you know whether or not you are affected by this staff reduction. If you’re affected, you’ll get details about what happens next in a subsequent email.
Please know that our first priority is to treat departures fairly, and I will describe more about how we do this below.
I also want to explain why we’re making these cuts, and what it means for Cruise moving forward.
Cruz today vs. Cruz moving forward
As mentioned, our goal is to focus our work on a fully driverless L4 service that meets the new autonomous vehicle performance standard, prioritize the Bolt platform, relaunch transit services in one city to start, and strengthen our safety standards and processes before we scale. . We have stopped working on Origin MY24 but we are not neglecting our work on future programmes. This is very different from our previous plans to expand to more than a dozen new cities in 2024.
As a result of our decision to slow commercialization, we are restructuring to focus on delivering improvements to the performance of our technology and vehicles that will build confidence in our autonomous vehicles.
Many of you will be affected because we are not marketing as quickly and therefore do not need support in specific cities or facilities. In other cases, we’ve restructured teams based on the work we prioritize. We did not make any of these decisions lightly, although I know that is not much consolation if you are someone affected by the actions we are taking today.
How we help departing employees
We know that there is no “good” way to lay off employees, but treating people fairly as they exit the business was a core principle guiding our approach, and our top priority was determining how we could deliver a robust severance package, while treating departing cruisers with respect. In short, we are offering departing cruisers pay, at a minimum, until April 8, 2024 (about 16 weeks), plus ongoing subsidized health benefits, RSU entitlement, a January 5 bonus, and additional immigration support for those on work visas. Chapter details include:
- Indemnity: Departing employees will remain on the payroll until February 12 and are eligible for an additional 8 weeks of pay, with an additional 2 weeks of pay being offered to employees each year at Cruise over 3 years.
- Bonus: All affected employees will receive their 2023 bonuses (target eligible payment) on January 5, 2024.
- Medical, dental, vision: We will offer cruisers and their dependents currently enrolled in cruise benefits the option to receive cruise-subsidized medical, dental, and mental health/EAP benefits through the end of May.
- Franchise portfolio: We will give cruisers two months to access the perks that are most important to them across our franchise portfolio.
- 401(k): We will give Cruisers two months to continue contributions to their 401(k) plan, including our employer match.
- RSU eligibility: All Cruisers, including those affected and remaining, will receive their RSU jacket on January 15. Additionally, we will provide liquidity for all January 15 shares in the first quarter based on the updated 409A fair market assessment we will conduct in the first quarter. The tax liability for these shares acquired on January 15 will not be incurred until we provide liquidity to you for these shares.
- Career support: Departing employees will receive a one-year subscription to LinkedIn Premium, and we will create a shared alumni directory to connect potential employers with affected cruisers. Cruise Talent Acquisition will also conduct workshops on resume building, networking and interview preparation for cruisers departing in the new year.
- Immigration support: We are offering ongoing time on payroll until March 24th rather than a lump sum payment to allow visa holders additional time to assist with the transition and manage their immigration status. Eligibility for the Perks Wallet, 401(k) contributions, and matching will also continue during this time. We also have dedicated support to assist cruisers based on their needs.
Our message to other employers in the market is that every departing cruiser is a talented, driven, mission-focused team member who will contribute and achieve great things elsewhere. They are leaving us through no fault of their own. Other companies would be lucky to have these professionals on their teams, as we were honored to have them here during their time at Cruise.
As mentioned earlier, within a few moments you will receive an email telling you whether or not you are affected by this staff reduction, and if you are, you will get details about what will happen next. I’m so sorry we had to do this via email, because I’d rather have a conversation with each of you. Unfortunately, given the scale of this change, this approach allows us to reach out to those who are affected at the same time. We know you want to say goodbye to your colleagues, so you’ll have access to Cruise and Zoom email for the next two hours (until 10 a.m. PT).
This is one of the hardest days we’ve had so far because a lot of talented people are leaving. I am grateful that we have the opportunity to work together, and I know that I speak on behalf of the many cruisers who will reach out to the departed for help with our professional networks and references. On behalf of SLT, the Cruise Board and GM, I am truly grateful to everyone who played a role in building Cruise and who put so much effort into the promise of making our roads safer and our world better.
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