General Motors’ Cruise has been hit with a major blow as the company recently announced the layoff of 900 employees, which accounts for 24% of its workforce. This move follows the dismissal of nine “key leaders” just a day earlier. The drastic measures were taken in response to an October 2nd accident involving a Cruise self-driving car, which dragged a pedestrian 20 feet after being struck by another vehicle. The incident has triggered a series of safety concerns and has further intensified the turbulence surrounding the robotaxi startup.
Cruise, majority-owned by GM, has been grappling with numerous issues since receiving approval in August for its round-the-clock robotaxi service in San Francisco. The accident in October led to the grounding of Cruise’s entire fleet of robotaxis, pending the outcome of independent safety investigations. To make matters worse, the company has faced significant leadership turmoil, halted production of a new model, and initiated the recall of hundreds of vehicles. As a result, both local and federal government agencies have launched their own investigations into the safety concerns surrounding Cruise’s operations.
This latest round of layoffs, primarily impacting commercial operations and related corporate functions, has dealt another blow to Cruise. The company, which previously had 3,800 employees, is now left with a significantly reduced workforce. Last month, Cruise also announced a separate round of contractor layoffs, further exacerbating the company’s turmoil. Affected employees will continue to receive paychecks until February 12th and will be provided with at least an additional eight weeks of pay, along with severance based on their tenure. Despite the difficult decision to reduce the workforce, Cruise assures its departing employees that they played an important role in building the company and supporting its mission.
A Shift in Focus
Cruise has indicated that its new goal is to focus on developing a fully driverless Level 4 service. Additionally, the company plans to relaunch its ride-hailing operations in one city as a starting point. This shift in focus comes as a strategic move to prioritize safety and reevaluate Cruise’s approach to commercialization. General Motors has expressed support for Cruise’s employment decisions, emphasizing its confidence in the team and its commitment to helping Cruise succeed in the long run. GM highlights trust, accountability, and transparency as the guiding principles for Cruise’s path forward.
The California Department of Motor Vehicles played a pivotal role in impacting Cruise’s operations when it suspended the company’s deployment and testing permits for autonomous vehicles in October. The suspension came with a stern statement from the DMV, asserting that permits can be immediately revoked when there is an unreasonable risk to public safety. This regulatory action further underscored the seriousness of the safety concerns surrounding Cruise’s operations.
In an effort to address the safety concerns at hand, Cruise took the initiative to suspend all trips on public roads following a board meeting held at their headquarters. Alongside this suspension, the company announced a reorganization and increased oversight from GM. Cruise also appointed an independent “safety expert” to assess its safety operations, while hiring Exponent, an engineering consulting firm, to conduct an expanded probe into its technology and safety systems. Notably, Exponent’s investigation into the October 2nd crash is still ongoing.
As Cruise navigates through these challenging times, the company’s ability to regain public trust and address safety concerns will undoubtedly dictate its future success. The outcome of the independent investigations, along with the company’s commitment to prioritizing safety, should provide crucial insights into Cruise’s ability to overcome its current setbacks and steer itself back on track towards achieving its vision of an autonomous transportation future.