Cruise has confirmed a 24 percent reduction in its workforce, resulting in the layoff of approximately 900 employees, as reported by TechCrunch and CNBC. This move comes more than 10 weeks after a notable incident in San Francisco, where a Cruise vehicle was involved in an accident that led to a pedestrian being pinned and dragged after an initial collision with another car. Earlier this week, Cruise also saw the departure of nine executives, including its chief operating officer.
In response to the layoffs, a Cruise spokesperson emphasized the company’s commitment to prioritizing safety in its commercialization plans. The reduction in workforce primarily affects commercial operations and related corporate functions. The spokesperson highlighted the company’s support for affected employees through robust severance and benefits packages, expressing gratitude to departing staff who played significant roles in building Cruise and advancing its mission.
The internal email from Cruise’s new President and CTO, Mo Elshenawy, acknowledged the anticipated nature of these changes and emphasized the difficulty, particularly for those directly impacted. The email specified that the layoffs primarily target non-engineering roles, including field workers, commercial operations, and corporate staffing.
The company email states, “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.”
This development doesn’t come as a surprise, as last month, GM Chair and CEO Mary Barra outlined plans for Cruise to adopt a more deliberate approach, including significant expense reductions “by hundreds of millions of dollars” in 2024. This signaled a clear indication that substantial layoffs were on the horizon.
The incident on October 2, where a Cruise vehicle was involved in an accident that resulted in a pedestrian being pinned after a hit-and-run by another car, contributed to this decision. Fortunately, there were no passengers in the autonomous vehicle at the time. The aftermath of the incident led to swift actions, with the California Department of Motor Vehicles (DMV) suspending Cruise’s driverless permits due to safety concerns. Reports also surfaced suggesting that the company’s autonomous vehicles faced challenges in effectively detecting children, necessitating additional precautions.
The approximately 900 employees affected by these layoffs at Cruise join the growing list of tech industry layoffs in 2023.