Cruise begins layoffs after suspending its self-driving robotaxis following a collision that dragged pedestrian
The article reports that Cruise, the self-driving car subsidiary of General Motors (GM), is undergoing significant layoffs, cutting 24% of its workforce, totaling 900 employees. The move is part of a broader strategy to reduce costs and restructure the company following an incident on October 2, where a pedestrian was struck and dragged by one of its autonomous vehicles.
The layoff announcement was made through an email from Cruise’s newly appointed president and CTO, Mo Elshenawy, who expressed the difficulty of the decision. The focus of the layoffs is on non-engineering roles, particularly in field operations, commercial operations, and corporate staffing. The email emphasizes the company’s commitment to simplifying and refocusing its efforts to provide an exceptional service, initially in one city, and concentrating on the Bolt platform.
GM’s acquisition of Cruise in 2016 led to a positive market response, with GM shares rising 4.8% to $35.64 following the layoff news. The company’s shares have been rewarded by shareholders for implementing cost-cutting measures.
Employees affected by the layoffs will remain on the payroll until February 12 and will be eligible for an additional eight weeks of pay, with long-term employees receiving extra compensation based on their years of service. The severance package includes health benefits through the end of May, contributions to the 401(k) plan for two months, and continued time on payroll through March 24 for immigrant employees.
Cruise emphasizes its commitment to supporting departing employees and acknowledges their contributions to building the company and supporting its mission. The layoffs coincide with the dismissal of nine senior leaders in Cruise’s commercial operations, legal, and policy departments.
The company aims to take a measured business approach to improve safety culture and put the autonomous vehicle subsidiary back on the right path. The restructuring plan, initiated after the resignation of co-founder and CEO Kyle Vogt, includes pausing production on its Origin robotaxi and refocusing on providing an exceptional service with the Bolt platform in one city before scaling.
The article also mentions the criticism faced by Cruise’s robotaxi operations in San Francisco, with incidents of vehicles stopping in the middle of roads, driving through police crime tape, and being involved in accidents. The layoffs were largely expected, and GM and the Cruise board have been working to address concerns raised by state, local, and federal agencies since the October 2 incident.
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