Job cuts at Apple as it scales back its self-driving car plans

SAN FRANCISCO: Apple Inc. has drastically scaled back its automotive ambitions, leading to hundreds of job cuts and a new direction that, for now, no longer includes building its own car, according to people familiar with the project.

Hundreds of members of the car team, which comprises about 1,000 people, have been reassigned, let go, or have left of their own volition in recent months, the people said, asking not to be identified because the moves aren’t public.

New leadership of the initiative, known internally as Project Titan, has re-focused on developing an autonomous driving system that gives Apple flexibility to either partner with existing carmakers, or return to designing its own vehicle in the future, the people also said. Apple has kept staff numbers in the team steady by hiring people to help with the new focus, according to another person.

Apple executives have given the car team a deadline of late next year to prove the feasibility of the self-driving system and decide on a final direction, two of the people said. Apple spokesman Tom Neumayr declined to comment.

The new shift and deadline come after months of strategy disagreements, leadership flux and supply chain challenges inside Apple’s unmarked car labs in Sunnyvale, California, a short drive from its Cupertino headquarters.

Apple isn’t the first to realize mastery of mobile gadgets and software updates is no guarantee of automotive success. Alphabet Inc.’s Google learned the challenges of building its own vehicles and has sought partners. Its car project has also suffered departures. Tech investors are dubious too. They’re used to fat profit margins, while carmakers survive on net margins well below 10%.

“For a quality Apple-branded car they could probably get a healthy margin,” said Eric Paul Dennis, an analyst at the Center for Automotive Research. “They probably weren’t willing to compromise on quality issues” because that could hurt the perception of its other products, he added. Apple started Titan in 2014 and an Apple-designed vehicle was targeted by the early 2020s.