Waymo’s Exodus Problem? Too Much Money for Employees

Google’s self-driving technology spinoff Waymo keeps suffering from a continuous drain of talents. And the problem is according to a Bloomberg-report money. Too much money for employees that is.

But let’s start from the beginning. Google’s project to develop driverless cars started in 2009, when the winner of the DARPA Grand Challenge, Sebastian Thrun, was hired by Google and tasked to build a team. He hired other participants of the contest. Google’s project triggered a race among car manufacturers, digital companies like Apple or Baidu, and new startups.

And some of the new startups were founded by former Googlers. Ot.to, an autonomous truck startup, was founded in January 2016 by Anthony Levandowski and acquired only eight months later by Uber.

Sebastian Thrun himself had left Google already in 2011 to start the online university Udacity, which is now offering – among other courses – a nanodegree for self-driving engineers.

Then in summer last year Chris Urmson, who had taken over the leadership of Googlés project in 2011, and surfaced shortly after with his startup called Aurora. And right away he was dragged into a legal battle with Tesla.

Another team founded Argo, that hit the news, when Ford announced to invest over a five year period one billion dollars.

Two years ago the Google project was moved into Google’s research unit X and graduated in autumn last year to become its own entity, aiming at commercializing the technology. Rumors have it that the exodus of people such as Levandowski and Urmson were caused by differences in expectations of market entry of the technology. The pace for team members was too slow. Levandowski, for instance, considers the trucking industry to be the first adopters for driverless technology and thus decided to co-found Ot.to. Also the new Waymo-CEO John Krafcik seemed to have different opinions and expectations about the direction the technology should take.

Now Bloomberg looked at the number of talent exits and their reasons. A surprising result is that one factor may have been important for the rapid drain: salaries and bonuses.

Team members receive bonuses based on the project value. That’s nothing unusual for Silicon Valley. Startup-employees often sacrifice lush salaries by betting that the stock options will be worth millions, once the startup goes public. Early employees of companies such as Google, Twitter, or Facebook turned multimillionaires after the IPO of their companies.

After such windfalls, employees often decide to leave the company and start their own thing. Also the demand of self-driving engineers is so hot that other companies lure them with astronomical salaries and free reign in the work.

And exactly that seems to happen. The spinoff of Waymo and the high bonus payments led to a drain of key talent exactly in that moment, when the company has to stand on its own feet. One early employee, for instance, received a bonus that was 16 times his base salary.

Although Waymo is the clear leader in developing self-driving technology (as can be seen from the disengagement reports from California), the exodus comes at a critical moment for the company

Here is a Video by Bloomberg with an analysis:

This article is also available in German.