GM Cruise on Thursday announced internally that it will lay off 900 employees, or 24% of its workforce. Cruise layoffs will affect around 24% of its workforce as it works to restructure operations following an accident that forced it to halt U.S. testing, the company said on Thursday.
The GM Cruise layoffs, which primarily affected commercial operations and related corporate functions, are the latest turmoil for the robotaxi startup. This come one day after Cruise dismissed nine “key leaders” for the company’s response to an Oct 2 accident in which a pedestrian was dragged 20 feet by a Cruise self-driving car after being struck by another vehicle.
Cruise layoffs 2023
There has been many layoffs at GM Cruise in 2023. The unit’s CEO Kyle Vogt and co-founder Dan Kan both resigned last month. On Wednesday, Cruise fired nine executives, including its chief operating officer and chief legal and policy officer amid an external investigation led by law firm Quinn Emmanuel into the accident and Cruise’s response.
GM Cruise layoffs of workforce
GM Cruise workforce was about 3,800 before Thursday’s cuts, which also follow a round of Cruise layoffs of contractor last month. Affected employees will receive paychecks until Feb 12 and at least an additional eight weeks of pay, plus severance based on tenure.
The Cruise automation layoffs of 900 of its 3,800 employees are primarily in commercial operations and related corporate functions. Cruise said it had also ended work for some “contingent workers who support our driverless operations.”
“This reflects our new future and a more deliberate go-to-market path, meaning less immediate need for field, commercial operations and corporate staffing,” Cruise said of the layoffs.
GM Cruise’s goal after layoffs
As per a Cruise representative the company’s goal is now to work on a fully driverless L4 service, as well as relaunching ride-hailing in one city to start.
GM added, “GM supports the difficult employment decisions made by Cruise as it reflects their more deliberate path forward, with safety as the north star. We are confident in the team and committed to supporting Cruise as they set the company up for long-term success with a focus on trust, accountability and transparency.”
GM Cruise accident
A barrage of safety concerns and incidents have plagued Cruise self-driving car, since it received approval in August for round-the-clock robotaxi service in San Francisco.
Since the GM Cruise accident, its self-driving car robotaxi fleet has been grounded, pending the results of independent safety probes; its leadership has been gutted. Also Cruise self-driving car production has been halted; hundreds of vehicles have been recalled; and local and federal government officials have launched their own investigations, among other concerns.
Cruise self-driving car suspension
In October, the California Department of Motor Vehicles suspended Cruise’s deployment and testing permits for its autonomous vehicles, alongside a statement that said, “When there is an unreasonable risk to public safety, the DMV can immediately suspend or revoke permits.”
Cruise’s decision to suspend all trips on public roads last month came after a board meeting at the company’s headquarters.
Cost cutting by GM
GM said last month it would cut costs at Cruise, which lost more than $700 million in the third quarter and more than $8 billion since 2016.
In November, Cruise said it would eventually re-launch in one unspecified city before expanding. Previously, Cruise had touted ambitious plans to expand to more cities, offering fully autonomous taxi rides.
Cruise could face $1.5 million in fines and additional sanctions over its failure to disclose details surrounding the accident, a California agency has said.
Mo Elshenawy took over as Cruise’s president last month and told an all-hands meeting in December that the autonomous vehicle unit has hit an “all time low.”
GM shares rose 5.4% on Thursday.