Struggling Cruise Cuts About 25 Percent of Its Workers

Cruise, the embattled self-driving car subsidiary of General Motors, said on Thursday that it would eliminate about 900 jobs, roughly a quarter of its work force, as the company looked to rein in costs after an October incident led California regulators to shut down its robot taxi operations.

Most of the job cuts are in corporate and commercial roles, which have become less important since the company voluntarily suspended all its driverless operations across the country in October. The shut down came two days after California’s Department of Motor Vehicles said that the company “misrepresented” its technology and ordered Cruise to stop operating in the state.

Cruise’s troubles can be traced to an Oct. 2 crash when a car hit a woman at a San Francisco intersection and flung her into the path of one of Cruise’s driverless taxis. The Cruise car dragged the woman some 20 feet before pulling to the curb, causing severe injuries. Regulators accused Cruise of omitting footage of its car dragging the woman from a video that it provided to state officials.

Since then, G.M., which bought the self-driving car start-up in 2016 for $1 billion, has stepped in to steer Cruise forward. The company hired the law firm Quinn Emanuel to investigate the crash and Cruise’s response. The driverless carmaker’s founders, Kyle Vogt and Dan Kan, resigned last month. And yesterday, the company dismissed nine senior executives, including its heads of operations and public affairs.

Instead of installing a new chief executive, G.M. appointed two presidents who are reporting to its board: Mo Elshenawy, Cruise’s executive vice president of engineering, and Craig Glidden, G.M.’s general counsel.

The company has been preparing employees for layoffs for more than a month; in late October, Mr. Vogt told employees in a companywide meeting that the loss of sales from ceasing operations would result in cuts.

“We knew this day was coming, but that does not make it any less difficult — especially for those whose jobs are affected,” Mr. Elshenaway said in an email to staff on Thursday, which was posted on the company’s website.

Cruise said laid off employees would continue to receive their pay through April 8, have health benefits through May and get their 2023 bonuses. News of the dismissals was reported earlier by the tech news site TechCrunch.

The layoffs come at the end of a year of cutbacks across the tech industry. Big tech companies including Microsoft and Google’s parent company, Alphabet, eliminated tens of thousands of jobs this year as they tried to reduce costs after hiring too many employees during the pandemic.

This is a developing story. Check back for updates.


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