According to General Motors its Cruise division revealed internally on Thursday that it will be laying off 900 workers, or 24% of its total employment.
The Robotaxi startup is currently experiencing turmoil due to layoffs that primarily affected commercial operations and related corporate functions. The layoffs occurred one day after Cruise fired nine “key leaders” for the company’s response to an accident on October 2 in which a pedestrian was dragged 20 feet by a Cruise self-driving car after being struck by another vehicle.
Shareholders applauded General Motors (GM), which purchased Cruise in 2016, for making the cuts. GM’s stock increased 4.8% to $35.64 after the announcement. Before the layoffs on Thursday, the company worked with 3,800 employees. Cruise had already announced a round of contractor layoffs last month. Paychecks for affected workers will continue until February 12 in addition to an additional eight weeks of compensation and tenure-based severance.
According to the email received by Cruise employees, Cruise is specifically targeting non-engineering positions for layoffs, especially those who worked in field operations, commercial operations, and corporate employees. Additionally, the business removed the assignments of contract workers who assisted with its driverless operations. Based on the content of the email and information from internal sources, engineering, which is a big division of employees at Cruise, is essentially being maintained.
Crusie has stated in response to these layoffs, “We shared the difficult news that we are reducing our workforce, primarily in commercial operations and related corporate functions. These changes reflect our decision to focus on more deliberate commercialization plans with safety as our north star. We are supporting impacted Cruisers with strong severance and benefits packages and are grateful to the departing employees who played important roles in building Cruise and supporting our mission.”
Cruise’s autonomous vehicle deployment and testing permits were halted by the California Department of Motor Vehicles in October after the incident that happened. A statement was also released at that time stating, “When there is an unreasonable risk to public safety, the DMV can immediately suspend or revoke permits.”
The company announced a reorganization, increased GM oversight, an independent “safety expert” to evaluate the company’s safety operations, and an extended investigation into Cruise’s technology and safety systems by Exponent, the engineering consulting firm that the company hired to analyze the Oct. 2 crash. Cruise decided to suspend all trips on public roads last month following a board meeting at its headquarters. Cruise said that Exponent is still conducting an investigation.
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