General Motors’ Cruise, the autonomous vehicle subsidiary, has faced a recent wave of challenges as it grapples with safety concerns and an accident that resulted in a pedestrian being dragged by a self-driving car. In response, the company has made the difficult decision to lay off 900 employees, representing 24% of its workforce. These job cuts primarily impact commercial operations and related corporate functions, further exacerbating the turmoil within the company.
The decision to reduce its workforce comes just one day after Cruise dismissed nine “key leaders” due to their handling of the October 2 accident. The incident involved a pedestrian being struck by another vehicle before being dragged 20 feet by a Cruise self-driving car. The aftermath of the accident has since led to a series of setbacks for the company, including a grounding of its robotaxi fleet, a halt in production for a new robotaxi, recalls of hundreds of vehicles, and investigations conducted by government officials. As a result, the company’s leadership has been significantly affected, with the departure of key figures adding to the instability.
In light of the challenges faced by Cruise, the company now plans to focus on developing a fully driverless L4 service. This strategic shift underscores the company’s commitment to prioritize safety as it navigates its way towards commercialization. Furthermore, Cruise intends to relaunch its ride-hailing operations in one city as it takes steps to rebuild trust and demonstrate accountability.
Although the layoffs are undoubtedly distressing for those affected, Cruise is committed to providing support for its departing employees. The impacted workers will continue to receive paychecks until February 12, along with at least an additional eight weeks of pay. Additionally, the employees will receive severance packages based on their tenure with the company. Cruise acknowledges the significant contributions of these individuals in shaping the company and advancing its mission.
The safety concerns surrounding Cruise have prompted investigations by both local and federal government officials. Following the October accident, the California Department of Motor Vehicles suspended Cruise’s deployment and testing permits for its autonomous vehicles, citing a potential risk to public safety. These safety concerns have necessitated the suspension of all trips on public roads, pending the completion of safety probes. Cruise has also taken steps to address these concerns internally, appointing an independent “safety expert” to assess its safety operations and commissioning an expanded probe into its technology and safety systems conducted by Exponent, an engineering consulting firm.
General Motors, as the majority owner of Cruise, expresses its support for the company’s employment decisions, recognizing the need for a more deliberate and safety-focused approach. GM emphasizes its confidence in Cruise’s team and reiterates its commitment to providing the necessary support as Cruise navigates these challenges. The ultimate goal is to set Cruise up for long-term success, with a renewed focus on trust, accountability, and transparency.
General Motors’ Cruise faces a significant challenge as it grapples with safety concerns and the aftermath of an accident. The decision to lay off 900 employees has added to the turmoil within the company and reflects the need to prioritize safety and deliberate commercialization plans. Cruise remains determined to overcome these obstacles, with a renewed focus on a fully driverless service and efforts to rebuild trust. While the road ahead may be challenging, the company is positioned to regroup, learn from its experiences, and set itself up for long-term success in the autonomous vehicle industry.