GM’s Cruise cuts jobs as it shifts away from robotaxi industry

In a significant pivot from its initial focus on robotaxi services, Cruise, a subsidiary of General Motors (NYSE: GM), has announced a restructuring plan that entails substantial job cuts affecting nearly half of its workforce. This strategic shift reflects Cruise’s decision to prioritize the development of personal autonomous vehicles over ride-hailing operations, as conveyed by company officials earlier this week.

With the impending layoffs impacting around 1,150 employees at Cruise, which was acquired by GM in 2016 and received over $10 billion in funding before the suspension of financial support in December, the company is embarking on a new phase of evolution. Cruise’s President and Chief Administrative Officer, Craig Glidden, highlighted the rationale behind the restructuring, stressing the altered staffing and resource requirements resulting from the shift away from the ride-hail business towards offering autonomous vehicles to consumers in collaboration with GM.

The reorganization at Cruise has led to a wave of departures from the company’s leadership team, including Chief Executive Marc Whitten, Chief Human Resources Officer Nilka Thomas, Chief Safety Officer Steve Kenner, and Chief Government Affairs Officer Rob Grant. Chief Technology Officer Mo Elshenawy will stay on until April to facilitate a smooth transition during this period of change.

As Cruise aligns more closely with its parent company, engineers are set to constitute a majority of the remaining workforce, reflecting the renewed strategic direction. Outgoing employees will be provided with adequate notice for a period of 60 days, in addition to a minimum of eight weeks of severance pay to support them through this transition phase.

The decision to downsize at Cruise comes on the heels of the company’s previous announcement in October to suspend its autonomous taxi service following an unfortunate incident where a pedestrian was dragged by one of its vehicles in San Francisco. A subsequent independent investigation uncovered discrepancies in Cruise’s transparency with regulators regarding the incident, exposing underlying weaknesses in oversight and communication practices within the organization.

The setbacks prompted a reevaluation of Cruise’s priorities, leading GM to consolidate Cruise as a wholly owned entity dedicated to advancing self-driving technology for individual vehicles rather than focusing on ride-hailing services. This strategic realignment signifies GM’s commitment to leveraging Cruise’s expertise in autonomous driving technology to enhance the development of personal autonomous vehicles.

As Cruise embarks on this new chapter, the company aims to harness its technological capabilities and engineering talents to drive innovation in the realm of self-driving vehicles, ultimately delivering safe and efficient autonomous solutions to consumers in partnership with General Motors.