Autonomous car firm Cruise to slash 24% of its workforce

The workforce, numbering approximately 3,800, received the news via an email from Mo Elshenawy, the company's newly appointed president and CTO. Elshenawy's message conveyed the challenging nature of the decision, particularly for those whose positions are being eliminated. Employees were to be notified shortly after the announcement if their roles were affected.

General Motors, which has owned Cruise since 2016, saw its shares climb by 4.8% to $35.64 post-announcement, indicating shareholder approval of the cost-cutting measures. The layoffs predominantly target non-engineering roles, focusing on field workers, commercial operations, and corporate staff. Meanwhile, engineering roles, which form a major part of Cruise's workforce, remain largely intact.

The email detailed the specifics of the staff reductions and the company's strategy to recalibrate its focus. Cruise plans to simplify operations, initially concentrating on providing services in one city using the Bolt platform before considering expansion. As a result, employee numbers in operations and other areas are being reduced, sparing engineering but affecting some technology roles.

Affected workers will stay on the payroll until the 12^th of February. Cruise confirmed the layoffs in a statement, emphasising their focus on safety and deliberate commercialisation plans. 

This development follows the recent dismissal of nine senior leaders from Cruise's commercial operations, legal, and policy departments. Changes at the executive level include appointing Craig Glidden, GM’s EVP of Legal and Policy and a Cruise Board Member, as Chief Administrative Officer at Cruise. Jon McNeill, a member of GM’s Board, has also been named Vice Chairman of the Cruise board.

Cruise's strategy shift comes after pausing production on its Origin robotaxi and intends to start services in one city initially, focusing on the Bolt platform. The company previously utilised all-electric Chevy Bolt vehicles for its robotaxi fleet and planned to transition to the custom-built autonomous vehicle, the Origin.

The layoffs were anticipated following GM's intention to significantly reduce spending at Cruise in 2024, a move expected to lead to widespread job cuts. The restructuring comes in the wake of the October 2^nd incident that has brought Cruise under scrutiny from various regulatory agencies. The incident involved a pedestrian being struck and dragged by a Cruise robotaxi in San Francisco, leading to criticism of the company's operations and safety standards.

Moreover, the California Department of Motor Vehicles suspended Cruise's driverless taxis in San Francisco following the accident, citing safety concerns and alleged misrepresentation of the incident by Cruise. This suspension represents a significant setback for the company, which had been making strides in establishing its presence in the city. Cruise, however, state they are committed to expanding its operations of its autonomous vehicles.