GM’s self-driving car subsidiary, Cruise, is implementing a significant workforce reduction, with 900 employees, or about 24% of its staff, being laid off. The move comes as the company aims to reduce costs and revamp its operations. The majority of the layoffs will target non-engineering positions, particularly those in field, commercial operations, and corporate staffing. Engineering roles, which constitute the bulk of Cruise’s workforce, will be largely unaffected.
The decision to downsize follows a recent incident involving one of Cruise’s robotaxis. On October 2, a pedestrian was struck and dragged by one of the autonomous vehicles, prompting concerns about the safety and reliability of the technology. Despite this setback, GM’s shares managed to rise by 4.8% to $35.64 following the announcement of the layoffs, indicating investor confidence in the company’s strategy.
In an effort to soften the blow for affected workers, Cruise will provide them with additional pay and benefits as part of their severance package. These include health benefits until May and continued payroll for immigrant employees. The company had recently fired nine senior leaders within Cruise, a move that preceded the decision to lay off employees.
Cruise intends to narrow its focus temporarily and concentrate on providing exceptional services in one city. Starting with the Bolt platform, the company plans to refine and perfect its offerings before expanding further. This strategy aims to address concerns and setbacks experienced by Cruise’s robotaxi operations in San Francisco. Videos circulate on social media frequently, depicting the autonomous vehicles obstructing traffic and entering construction sites.
The layoffs were anticipated for several weeks, as GM and the Cruise board aimed to reduce spending by hundreds of millions of dollars by 2024. This renewed focus on cost control and optimization is part of Cruise’s overall plan to streamline operations and position itself for future success in the self-driving car industry.
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