In a drastic move, Cruise, the self-driving unit of General Motors, is set to lay off almost a quarter of its workforce, totalling 900 employees.
This decision follows a recent incident where a pedestrian was struck and dragged 20 feet by a Cruise robotaxi, leading to the suspension of the company’s permit to operate driverless cars in California.
The hit-and-run incident prompted Cruise to ground its entire robotaxi fleet nationwide, affecting operations in Arizona, Texas, and Florida.
In response to the crisis, General Motors announced a reduction in spending on Cruise and the appointment of its own executives to oversee the company.
The fallout has seen several top executives, including co-founder and CEO Kyle Vogt and chief product officer Dan Kan, leave the company. Yesterday, nine more executives, including chief legal and policy officer Jeff Bleich and senior vice president of government affairs David Estrada, were dismissed.
“We knew the day was coming”
Mo Elshenawy, Cruise’s VP for engineering, has been promoted to president and chief technology officer. In a memo to employees, Elshenawy acknowledged the difficulty of the situation, stating, “We knew this day was coming, but that does not make it any less difficult—especially for those whose jobs are affected.”
The staff reductions, affecting 24 percent of full-time employees, are primarily in the commercial operations division and related corporate functions. Cruise emphasised its commitment to supporting departing workers, offering extended benefits, an end-of-the-year bonus, and additional pay based on years of service.
Affected employees will remain on payroll through February 12th, with eligibility for an additional eight weeks of pay. Long-term employees will receive an extra two weeks’ pay for each year at Cruise over three years.
What does the future look like?
Cruise plans to relaunch its driverless ridehail operations in one city and prioritise the use of the Chevy Bolt platform for its fleet. The production of its Origin shuttle without steering wheel and pedals will remain indefinitely paused.
The October 2nd incident has cast a shadow over Cruise, leading to external reviews of safety protocols and a voluntary recall of all 950 Cruise vehicles to update software and prevent similar incidents.
General Motors, despite losing $8.2 billion on Cruise since 2017, intends to maintain a focus on self-driving technology. GM CEO Mary Barra expressed optimism about the future of fully driverless cars, stating that the recent challenges stemmed from communication issues with regulators.
The company’s decision to cut spending on Cruise is a direct consequence of the pause in driverless operations, clarifying that the layoffs are a result of the operational halt, not reduced spending.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.