Cruise, a company specializing in autonomous vehicles, is set to reduce its workforce by “nearly” 50%, impacting not only employees but also high-ranking officials including the CEO. The remaining team will be integrated into General Motors, as the car manufacturer reallocates its resources towards enhancing its Super Cruise hands-free driving system and ultimately plans to launch personal autonomous vehicles.
The announcement regarding the layoffs was communicated by Craig Glidden, the president and chief administrative officer of Cruise, in an email obtained and confirmed by TechCrunch. Those impacted received a distinct notification from the Chief Human Resources Officer, Nilka Thomas.
This week, CEO Marc Whitten, alongside other top executives such as Thomas, Chief Safety Officer Steve Kenner, and Rob Grant, the Global Head of Public Policy, will leave the company.
Meanwhile, Mo Elshenawy, Cruise’s chief technologist, will remain through the end of April to assist with the transition process.
“Due to the strategic shift we announced in December, we will be reducing our workforce by nearly 50%,” reads Glidden’s email. “Everyone familiar with this kind of change knows it’s a tough situation, and today is no exception. As we pivot away from the ride-hailing sector towards delivering autonomous vehicles to customers, alongside GM, our staffing requirements have shifted significantly. These changes will align our teams with our current needs and allow us to focus on advancing our state-of-the-art AV technology.”
As of January 2024, Cruise had an estimated workforce of around 2,100 employees, based on the number of individuals active in a company announcement Slack channel. This indicates that over 1,000 employees may be affected by the cuts.
“Cruise has made the challenging decision to reduce its workforce by roughly 50%,” the company stated in a release. “We deeply appreciate the dedication and contributions of those affected in helping us reach this point, and we are committed to supporting them as they transition to their next opportunities with severance packages and career assistance. Though this was a difficult decision, we are focused on combining efforts with General Motors to expedite the rollout of autonomy at scale for personal vehicles.”
Following the layoff announcement, GM confirmed that it has finalized its acquisition of GM Cruise Holdings LLC after receiving approval for the merger from the Cruise board. Consequently, Cruise is now a fully-owned subsidiary of GM.
Employees who were laid off will remain on payroll until April 5, receiving benefits through the end of April. They will receive eight weeks of severance pay along with benefits, while those who have been with the company longer than three years will receive an additional two weeks of pay and benefits for each subsequent year. Additionally, all affected employees will have access to three months of company-paid COBRA coverage and a year-long LinkedIn Premium subscription to assist with their job search.
These layoffs come shortly after GM announced a halt to funding for the robotaxi development initiative, opting instead to concentrate on the technology for personal autonomous vehicles.
GM anticipates that ceasing the Cruise robotaxi program would yield savings of up to $1 billion annually, as discussed during the company’s fourth-quarter earnings report. CFO Paul Jacobson indicated these savings assume that “Cruise employees will be fully integrated into GM by mid-year.”
In mid-January, Cruise management began extending retention offers to mainly engineering staff. An email from CEO Marc Whitten indicated that further steps would follow a board meeting, which took place on Monday, according to one source.
Though initially caught off guard by GM’s decision to discontinue the robotaxi initiative, Cruise employees had been anticipating an announcement for weeks.
Sources indicated to TechCrunch that, following GM’s announcement, employees were left uncertain about their job security and had been in a state of inactivity. On Monday afternoon, Glidden communicated via Slack that he planned to share “some news regarding the transition plans tomorrow” and suggested employees “work from home.”
“We appreciate your patience during this challenging time – we recognize the uncertainty has been difficult, yet you have managed the past few weeks with utmost professionalism,” Glidden wrote.
Previously, Glidden held the position of GM’s executive vice president of legal and policy but was assigned to Cruise in November 2023, following a safety incident that severely impacted the company.
On October 2, 2023, a Cruise robotaxi hit a pedestrian who had been thrown into its path by a vehicle operated by a human. The robotaxi subsequently dragged the pedestrian, who was caught underneath, for approximately 20 feet as it attempted to maneuver to the side.
Cruise officials failed to promptly disclose this critical information to authorities, which led to California’s Department of Motor Vehicles and Public Utilities Commission immediately revoking the company’s operating permits. As a result, Cruise suspended its entire fleet of robotaxis and witnessed the resignation of a significant portion of its leadership, including co-founder and CEO Kyle Vogt.
After appointing a new leadership team, including a permanent chief safety officer, Cruise was preparing for a relaunch in Austin at the beginning of this year. Throughout 2024, the company focused on testing in Phoenix, Dallas, Houston, and the Bay Area while enhancing its safety measures. Two sources familiar with the situation revealed to TechCrunch that the company was set to implement an internal retrofitted sensor solution, known as Project Rhino, which was intended to address the October incident by increasing visibility beneath the vehicle.
In June 2024, GM invested an additional $850 million into Cruise, bringing its total investment in the company since acquiring a majority stake in 2016 to nearly $10 billion. In September, Elshenawy hosted a large event for Cruise employees, which some interpreted as a sign of the company’s progress.
An earlier report indicated a layoff figure of 40%, but Cruise later amended that figure to reflect Glidden’s email, which specified that nearly 50% of the workforce would be cut.
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