General Motors’ autonomous vehicle subsidiary, Cruise, has suspended its employee share-selling program for the fourth quarter. This decision comes after Cruise lost its permits to operate in California due to an incident. According to anonymous sources, Cruise stated the need to reevaluate its compensation structure to remain competitive.
Cruise has confirmed this news to TechCrunch. The impact on employees varies depending on their start date and the stock price at that time. Some employees could potentially face losses exceeding $100,000, while others may lose tens of thousands of dollars.
To address low morale among its workforce, Cruise has moved up corporate bonuses from March to January. Reports suggest that this adjustment was made to appease dissatisfied employees. Additionally, Cruise surprised its employees with a holiday, potentially to boost morale or plan for layoffs and operational changes, as speculated by sources.
The employee share program involves General Motors repurchasing vested equity quarterly to ensure liquidity. However, Cruise’s valuation has changed following an incident on October 2, where a pedestrian was stuck under and dragged by a Cruise robotaxi. As a result, sources claim that canceling the share program renders the shares worthless.
The suspension of permits in California, along with the halt in all operations and production of the purpose-built Origin robotaxi, has made layoffs inevitable for Cruise. The company has already begun laying off contract workers.
According to GM’s financial records, Cruise has incurred losses of over $8 billion since 2017, including $728 million in the third quarter of 2023. Despite this, Cruise has $1.7 billion in cash, providing a nine-month runway.
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