Cruise, GM’s embattled self-driving car subsidiary, is laying off 900 employees, or about 24% of its workforce, TechCrunch has exclusively learned. The layoffs are part of a plan to cut costs and attempt to turn the company around following an incident on 2 October in which a pedestrian was pinned under one of its robotaxis and then dragged away.
An email penned by newly appointed president and CTO Mo Elshenawy was sent to the company’s entire 3,800-strong workforce this morning. The email, seen by TechCrunch, began with a resigned tone: “We knew this day was coming, but that doesn’t make it any less difficult – especially for those whose jobs are affected,” Elshenawy wrote. Workers were expected to be told within an hour of receiving the company-wide email whether they would lose their jobs.
GM, which acquired Cruise in 2016, was rewarded by shareholders for the cuts. GM shares rose 4.8% to $35.64 on the news.
Cruise is targeting non-engineering positions in the layoffs, particularly those who have worked in the field, commercial operations and corporate staffing, according to the email. The company has also ended additional assignments of contingent workers who supported its driverless operations. Engineering, a category that makes up the bulk of Cruise’s workforce, will be largely preserved, according to the email and discussions with internal sources.
Employees will remain on the payroll until 12 February and will be entitled to an additional eight weeks’ pay, with long-term employees being offered an additional two weeks’ pay for every year they have been with Cruise over three years, according to the email to staff. Those laid off will also receive their 2023 bonus (eligible target payout) on 5 January 2024. Other parts of the severance package include health benefits through the end of May, two months of contributions to their 401(k) plan, and continued payroll through March 24 for immigrants in lieu of a lump-sum severance payment to allow visa holders additional time to transition and manage their immigration status.
The company also said that all employees, regardless of whether they have been laid off, will receive their January 15 vesting through the employee stock purchase plan.
Cruise issued a statement confirming the redundancies.
“We have shared the difficult news that we are reducing our workforce, primarily in commercial operations and related corporate functions,” the emailed statement reads. “These changes reflect our decision to focus on more deliberate commercialisation plans with safety as our North Star. We are supporting affected Cruisers with strong severance and benefits packages and are grateful to the departing employees who have played an important role in building Cruise and supporting our mission.”
The layoffs come just one day after nine of Cruise’s senior leadership team (SLT), who worked in the company’s commercial operations, legal and policy departments, were dismissed by the company’s board of directors. The group included COO Gil West and David Estrada, who was head of government affairs.
Elshenawy reiterated that the company would be narrowing and refocusing its efforts, information shared last month following the resignation of co-founder and CEO Kyle Vogt and some executive shuffling that included the appointment of 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 of directors, has also been appointed vice chairman of Cruise’s board of directors. McNeill, who recently joined the Cruise board and was previously chief operating officer of Lyft and president of Tesla, now serves alongside GM Chairman and CEO Mary Barra.
Cruise executives said at the time that they wanted to take a measured business approach that conserved cash and improved safety culture in an attempt to get GM’s troubled autonomous vehicle subsidiary on the right track. The first steps in that turnaround plan, which included halting production of the Origin robotaxi, were laid out in an internal email sent to employees in late November by Elshenawy, who was executive vice president of engineering at Cruise and ascended to the role of president after co-founder and CEO Vogt stepped down.
Elshenawy reiterated that intention in Thursday morning’s email, saying the company was “simplifying and focusing our efforts to return with exceptional service in one city to start, and focusing on the Bolt platform for this first step before we scale”.
Cruise has been using all-electric Chevy Bolt vehicles, built specifically to support its self-driving system, in its fleet of robot taxis. The company intended to move to a purpose-built autonomous vehicle called the Origin.
The redundancies at Cruise have been widely expected for weeks. Last month. Barra reiterated plans for Cruise to be more “deliberate” when the troubled self-driving vehicle subsidiary eventually resumes operations. For GM, that includes cutting spending at Cruise by “hundreds of millions of dollars” in 2024, a move that most expect to result in widespread layoffs.
GM and Cruise’s board have been scrambling since the October 2 incident put the company in the crosshairs of state, local and federal authorities. However, Cruise’s robotaxi operations in San Francisco had been criticised by the public and city officials almost immediately after the California Public Utilities Commission granted the company the final permit needed to operate commercially in August. Videos of Cruise robotaxis blocking traffic and driving into a construction site were shared on social media. But it was a collision with an emergency vehicle that began to chip away at the company’s seemingly impenetrable exterior.
