Cruise, the autonomous vehicle subsidiary of GM, is undergoing a significant restructuring, cutting 900 jobs, or approximately 24% of its workforce, in an effort to reduce costs and rejuvenate the company’s direction. TechCrunch obtained exclusive information about these layoffs, which come in the wake of an incident on October 2 involving one of its robotaxis that resulted in a pedestrian accident.
An internal email from the newly appointed president and CTO, Mo Elshenawy, was circulated to the entire 3,800-person staff, acknowledging the challenging decision and indicating that affected employees would be notified promptly about their job status.
Following the layoffs, GM’s shares surged by 4.8% to $35.64, reflecting shareholder approval of the cutbacks. Cruise is primarily targeting non-engineering roles in fields such as operations, commercial operations, and corporate staffing, while aiming to retain its core engineering workforce.
The email highlighted the necessity of reducing 24% of full-time staff due to a strategic shift towards streamlining operations, focusing on providing exceptional service in one city initially, and emphasizing the Bolt platform before scaling up. The impact will mostly affect non-engineering roles, although some technical positions will also be affected.
Affected employees will remain on payroll through February 12 and will receive additional compensation, with long-term employees offered extra pay based on their tenure at Cruise. The severance package includes extended health benefits, contributions to their 401(k) plans, and continued payroll for immigrant workers to assist with visa transitions.
Cruise confirmed the layoffs in a statement, emphasizing the decision’s alignment with their commitment to deliberate commercialization plans centered on safety. These layoffs come after the recent dismissal of nine senior leaders from Cruise’s commercial operations, legal, and policy departments.
The company plans to refocus its efforts and business strategy following the resignation of its co-founder and CEO, Kyle Vogt. The restructuring involves a measured approach to conserve cash and enhance safety culture, which includes pausing production on its Origin robotaxi.
Cruise, previously using electric Chevy Bolt vehicles in its fleet, intended to transition towards its custom-built autonomous vehicle, the Origin. However, the recent layoffs were anticipated as part of a broader strategy to cut spending and streamline operations at Cruise, particularly after the October incident drew regulatory scrutiny.
Despite criticism and challenges faced by Cruise in its San Francisco robotaxi operations, the company aims to revamp its services, prioritizing safety and efficiency in its autonomous vehicle initiatives.
