Cruise restructures with major layoffs amid safety and cost concerns

Cruise, General Motors’ self-driving car subsidiary, is facing significant changes as it announces the layoff of 900 employees, approximately 24% of its workforce. This decision, as reported by TechCrunch, is part of a broader strategy to reduce costs and revitalize the company following a recent incident involving one of its robotaxis.

The company began reevaluating its operations after an Oct. 2 incident, in which a Cruise robotaxi struck and dragged a pedestrian. The email sent by Cruise’s new president and CTO, Mo Elshenawy, to the 3,800-person workforce, conveyed the gravity of the situation and the tough decisions ahead.

The layoffs primarily target non-engineering roles, focusing on field, commercial operations, and corporate staffing. Engineering roles, which form a significant part of Cruise’s workforce, are largely unaffected. Affected employees will receive severance packages, including extended payroll, health benefits, 401(k) contributions, and their 2023 bonus.

Market reaction to layoffs and Cruise’s strategic shift

GM’s shares rose 4.8% following the announcement, indicating shareholder support for the cost-cutting measures. Elshenawy’s email outlined Cruise’s new direction, focusing on delivering exceptional service in one city using the Bolt platform before scaling up operations. This shift marks a departure from previous plans involving the custom-built Origin robotaxi.

The layoffs follow the recent dismissal of nine senior leaders at Cruise and the resignation of co-founder and CEO Kyle Vogt. The company is now led by Elshenawy, with Craig Glidden and Jon McNeill playing key roles in its restructuring. Cruise aims to adopt a more measured business approach, prioritizing cash preservation and safety culture improvements.

Cruise’s operations have faced public and official scrutiny, particularly in San Francisco, where its robotaxis have been involved in traffic disruptions and a collision with an emergency response vehicle. The Oct. 2 incident has further intensified the focus on the company’s safety record and operational practices.

Maxwell William

Maxwell William, a seasoned crypto journalist and content strategist, has notably contributed to industry-leading platforms such as Cointelegraph, OKX Insights, and Decrypt, weaving complex crypto narratives into insightful articles that resonate with a broad readership.