Self-driving car company Cruise will lay off "nearly" 50% of its staff, including its CEO and several other executives, as it prepares to shut down operations. The remainder of Cruise will be transferred under parent company General Motors as GM directs resources toward improving its hands-free driver assistance system, SuperCruise, and eventually launching personal self-driving cars.
The layoffs were announced by Cruise President and Chief Administrative Officer Craig Glidden in a company-wide email.
Chief executive Marc Whitten will leave the cruise line this week, along with Thomas, chief safety officer Steve Kenner and global head of public policy Rob Grant.
Cruise's chief technology expert Mo Elshenawy will stay on until the end of April to help with the transition.
"As a result of the strategic changes we announced in December, today we are laying off nearly 50% of our Cruise workforce through layoffs," Gladden wrote in an email. "Anyone who has experienced layoffs knows that days like this are tough, and today is no exception. As we transition from ride-hailing to delivering self-driving vehicles to customers with General Motors, our people and resource needs have changed dramatically. Today's actions align our teams with new demands and focus on continuing to build world-class self-driving technology."
Cruise has about 2,100 employees as of January 2024, according to people familiar with the matter, who estimate based on the number of members on the company's Slack channel. This means that more than 1,000 employees may be affected by the layoffs.
"Cruise, like other companies, has made the difficult decision to part ways with approximately 50% of its employees," Cruise wrote in an emailed statement. "We are grateful for their passion and contributions that have helped get us to this point, and our focus is on providing them with severance and career support to help them move into the next phase. While this is not an easy decision, we are focused on working with General Motors to accelerate self-driving at scale for personal autonomous vehicles."
General Motors issued a press release (after announcing the layoffs internally) stating that after General Motors' merger offer was approved by Cruise's board of directors, General Motors has completed the acquisition of General Motors Cruise Holdings LLC. Cruise is now a wholly owned subsidiary of General Motors.
All laid off employees will continue to receive the company's salary until April 5 and enjoy the company's benefits until the end of April. Affected employees will receive eight weeks of severance pay and benefits. Long-term employees will receive an additional two weeks of pay and benefits for each year of service over a three-year period. All employees will also receive three months of company-paid COBRA insurance, as well as a one-year Linkedin Premium subscription to support their job search.
The layoffs come nearly two months after General Motors said it would no longer fund the development of a commercial self-driving taxi business and instead focus on developing self-driving vehicle technology for private vehicles.
The automaker expects to save up to $1 billion annually by ending the Cruise self-driving taxi development program, according to details the company shared during its fourth-quarter earnings call. At the time, Chief Financial Officer Paul Jacobson said the projected cost savings were based on the assumption that Cruise employees would be fully integrated into GM by mid-year.
On October 2, 2023, one of Cruise's self-driving taxis ran over a pedestrian who was thrown into the lane by a human-driven car. The self-driving taxi then dragged the pedestrian who was stuck underneath the vehicle for about 20 feet as it attempted to overturn. Cruise officials did not immediately share this information with authorities, and when it was disclosed, the California Department of Motor Vehicles and Public Utilities Commission immediately suspended the company's operating license. Subsequently, Cruise suspended operations of all of its self-driving taxi fleets across the United States, and most of its leadership team, including co-founder and CEO Kyle Vogt, stepped down.
Cruise is preparing to relaunch its operations in Austin early this year after appointing new leadership, including a permanent chief security officer. The company spent much of 2024 conducting tests and beefing up security systems in Phoenix, Dallas, Houston and the Bay Area. The company said it is ready to implement an additional sensor solution, known internally as Project Rhino, that will address incidents like the one that occurred on October 2 by increasing visibility and awareness of the underside of the vehicle.
In June 2024, General Motors injected another US$850 million into Cruise, bringing its total expenditure in the company since acquiring a majority stake in Cruise in 2016 to nearly US$10 billion. In September, Cruise president and chief technologist Elsnavi hosted a lavish party for Cruise employees, which some saw as a sign that the company was moving forward.