Cruise, the autonomous vehicle subsidiary of General Motors, told staff Thursday in an email that its fourth-quarter employee stock sale program is being suspended, following an incident that resulted in the robotaxi company losing its licenses to operate in California . Cruise cited the need to reevaluate how it offers competitive compensation, according to sources who spoke to TechCrunch on condition of anonymity.
Cruise confirmed the news to TechCrunch.
The loss for workers depends largely on when they started and what the stock price was at that time. A few employees could easily lose $100,000. Sources we spoke to said they will lose over tens of thousands of dollars.
Corporate bonuses also rose two months, from March to January. Some sources suggest that senior leadership adjusted the company’s bonus program to appease workers who have described low morale throughout its ranks.
At that point, Cruise issued an unexpected company holiday for tomorrow to ostensibly boost morale among workers who have expressed frustration with the plan. Sources also speculate that the holiday is an opportunity for executives to plan layoffs or operational changes.
The employee share plan includes GM’s repurchase on a quarterly basis to facilitate recurring liquidity. Shares have historically been bought based on valuation, but Cruise’s valuation changed after an Oct. 2 incident that left a pedestrian stuck and swept away by a Cruise robotaxi. Canceling the program, sources say, makes the shares worthless.
Cruise employees still own stock in the company, but because it’s not publicly traded, it can only be sold if GM schedules a liquidity event, which traditionally takes place every quarter. A third party evaluates and sets a valuation for the shares before an auction takes place.
After losing its licenses in California, ceasing all operations (driverless and manual) across the country and ceasing production on its custom-built Origin robotaxi, layoffs are imminent. The cruise already started last week with contracted people.
Cruise has lost more than $8 billion since 2017, including $728 million in the third quarter of 2023, according to GM financial filings. Cruise ended the third quarter with $1.7 billion in cash, which will give her nine months on the runway.
