GM’s Cruise lays off 24% of staff following pedestrian crash case

GM’s Cruise, the manufacturer of the self-driving robotaxi, announced it was laying off 900 employees Thursday, calling it a “necessary step” for the company's long-term future.

The company posted the announcement on its website along with a copy of an explanation letter sent to all "Cruisers" on Thursday by Cruise President and CTO Mo Elshenawy.

“We knew this day was coming, but that does not make it any less difficult – especially for those whose jobs are affected,” the letter reads.

“Today, we are making staff reductions that will affect 24% of full-time Cruisers, through no fault of their own. We are simplifying and focusing our efforts to return with an exceptional service in one city to start with and focusing on the Bolt platform for this first step before we scale. As a result, we are reducing our employee counts in operations and other areas,” Elshenawy said.

The letter also acknowledged the nine C-suite executives who were fired in the wake of the safety probe On December 13th.

Cruise is facing more than $1.5 million in fines, plus other sanctions, after California regulators found the company liable for misleading the public and non-disclosure of a crash involving one of its self driving taxis and a pedestrian.

During the October 2nd accident, the pedestrian, who was first strick by another vehicle, was thrown in the path of and dragged by the robotaxi more than 20 feet in a busy intersection of San Francisco.

As a result of the pedestrian accident, Cruise recalled 950 of its driverless cars.

At the end of October, Cruise suspended all its robototaxi operations across the US after the California Department of Motor Vehicles (DMV) revoked its driving permits, claiming that the robotaxis are a risk to public safety.

Elshenawy said he and co-President Craig Glidden believe the restructuring and layoffs are a “necessary step,” and that Cruise’s leadership team and board are “fully aligned with how our go-forward US staffing needs will map to the priorities ahead of us and set up Cruise for the long term.”

The staff was then told it would receive an email momentarily letting them know if they were getting axed by the company (ouch).

Cruise also laid out a detailed severance plan put in place for those being forced out as part of Cruise’s restructuring plan., including full pay through mid-February, 8 weeks of severance pay, a 2023 bonus, paid health insurance through May, and career support.

The layoffs may not be that big of a surprise for Cruise employees. On October 26th, after the DMV refused to renew its permits, Cruise posted several messages on X alluding to a company shake-up.

"Part of this involves taking a hard look inwards and at how we do work at Cruise, even if it means doing things that are uncomfortable or difficult," Cruise posted.

Although the most serious, it’s not the first accident to make headlines involving a Cruise autonomous vehicle (AV) this year.

The company was already being scrutinized by the National Highway Traffic Safety Administration (NHTSA) after another Cruise robotaxi crashed into the back of a San Francisco Muni bus in March, forcing a recall of 300 robotaxis.

Cruise first began its fully self-driving service in San Francisco in early 2022.

The company had previously announced plans to expand its driverless fleet to passengers in Austin, Texas, and Phoenix, Arizona by the end of 2023, which seems unlikely now.

Moving forward the company said it will focus on enhanced safety standards, as well as tech and vehicle improvements that “will build trust in our AVs.”