GM’s Cruise lays off 900 employees, or 24% of its workforce
This workforce reduction adds to the recent challenges faced by the Robotaxi startup. Just a day earlier, Cruise had let go of nine “key leaders” due to concerns about the company’s handling of an accident in October. These layoffs follow another round of contract worker layoffs at Cruise about a month ago.
Cruise Automation, primarily owned by GM and functioning as a General Motors subsidiary, is a developer of autonomous vehicles. Since gaining approval in August for round-the-clock robotaxi service in San Francisco, Cruise has faced a series of safety issues and incidents.
The turmoil began with an October 2 accident where a pedestrian was dragged 20 feet by a Cruise self-driving car after being hit by another vehicle. Subsequently, Cruise’s robotaxi fleet has been grounded, awaiting the outcomes of independent safety investigations. The leadership team has undergone significant changes, production of a new robotaxi has been halted, numerous vehicles have been recalled, and both local and federal government investigations have been initiated.
In response to the October incident, the California Department of Motor Vehicles took action by suspending Cruise’s deployment and testing permits for its autonomous vehicles. The decision was accompanied by a statement emphasizing that when there is an unreasonable risk to public safety, the DMV has the authority to immediately suspend or revoke permits.
Founded in 2013, by Kyle Vogt and Dan Kan, Cruise tests and develops autonomous car technology, GM announced plans to invest $14 million to expand Cruise operations in California, adding an estimated 1,163 full-time employees by 2021.
In May 2018, Cruise announced that Softbank’s Vision Fund would invest $2.25 billion into the company, along with another $1.1 billion from GM itself followed by Honda’s investment of $750 million in October 2018. Cruise got a new CEO, Dan Ammann late last year.