General Motors’ beleaguered self-driving car subsidiary Cruise said Thursday that it was laying off roughly a quarter of its workforce, after months of turmoil and years of financial losses.
The job cuts will impact approximately 900 of the company’s full-time staffers, and mostly workers in commercial and corporate operations, according to a company statement shared on Cruise’s website.
In October, a driverless Cruise vehicle hit a pedestrian in downtown San Francisco who had already been struck by another vehicle, and then dragged the pedestrian along the road for some 20 feet. In the wake of the incident, California regulators suspended Cruise’s driverless taxi testing permits. When revoking Cruise’s permits, the California Department of Motor Vehicles also accused the company of withholding information and video regarding the accident.
Shortly after that, Cruise voluntarily paused its operations across the country.
“We knew this day was coming, but that does not make it any less difficult —especially for those whose jobs are affected,” Mo ElShenawy, president and chief technology officer at Cruise, wrote in a memo to employees announcing the layoffs. The note added impacted employees will receive an email “in a few moments” letting them know whether they are “affected by this staffing reduction.”
ElShenawy added the the company has the goal of “simplifying and focusing our efforts to return with an exceptional service in one city to start with,” though he did not share further details on which city Cruise is planning on returning to once it resumes operations. The company operated cars in San Francisco, Phoenix, and Austin, Texas.
The laid-off employees will remain on payroll through February 12, the memo added, and are eligible for up to an additional eight weeks of severance pay, depending on how long they have been at the company.
In late November, GM said it was cutting spending on Cruise. “We expect the pace of Cruise expansion to be more deliberate when operations resume and spending will be substantially lower in 2024 than it was in 2023,” GM chief executive Mary Barra said at an investor event.
Thursday’s layoffs also come after a major leadership shakeup at Cruise on Wednesday, according to Reuters, which saw the departure of nine executives, including its chief operating officer.
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