Driverless Cruise Lays Off Over 900 Employees Following Months Of Turmoil, Incidents

Cruise, the San Francisco-based driverless car and robotaxi subsidiary of General Motors, announced on Thursday that they would be laying off over 900 employees, due in large part to the company’s ongoing problems in California.

In 2022 and most of 2023, Cruise enjoyed extensive growth in San Francisco and other cities in the U.S. alongside Google’s robotaxi service Waymo. In August 2023, Cruise had 300 vehicles driving around San Francisco at night and 100 during daytime hours, with Waymo only operating 250 vehicles during the day. While there were many complaints with the service, including reports of blocked traffic, blocking emergency workers, blocking mass transit, and other worrying behavior, the California Public Utilities Commission (CPUC) voted 3-1 in August to expand robotaxi services in San Francisco by being able to offer paid rides at any time during the day throughout the city, and not be constrained by prior geographic limits, designated operating hours, and paid ride limits.

However, this was to be short-lived. While there were numerous incidents involving Cruise robotaxis before the CPUC expansion, the number soon skyrocketed that month. The rapid expansion caused more accidents to occur – 10 Cruise robotaxis stalled and caused a major backup. Another taxi careened into a construction site and got stuck in wet concrete. A Cruise vehicle even caused a passenger injury when it crashed into a firetruck. Faced with more and more of the public opposing robotaxis, and concerns growing over their safety, Cruise announced on August 22nd that their fleet of robotaxis would be cut in half.

Even with the reduced fleet, Cruise incidents still occurred at a high frequency. On October 2nd, a pedestrian who had just been struck by another car was struck by a Cruise vehicle despite otherwise stopped traffic, dragging the passenger for an additional 20 feet. Those accidents caused large-scale protests to break out statewide against driverless cars and robotaxi services.

Only days later on October 25th, the California DMV ordered Cruise to stop all operations in the state because of safety concerns over recent accidents. With San Francisco in doubt, and Los Angeles looking at ways to reign in robotaxis, Cruise announced on October 27th that they would be suspending operations nationwide because of safety concerns. In November, Cruise then announced massive layoffs because of the suspension of operations, GM putting less money into Cruise in 2024, as well as the resignation of Cruise CEO Kyle Vogt and co-founder Dan Kan. Despite this, CPUC continued to look into Cruise accidents, in particular the October 2nd pedestrian dragging incident.

Earlier this month, CPUC set up a court date to fine the company an additional $1.5 million over the October crash, as well as the firing of nine executives at the beleaguered company. However, with the company’s reputation now severely damaged and their ability to operate being effectively stymied by the government, Cruise announced on Thursday that over 900 employees, roughly 24% of their workforce, will be laid-off as a result.

Over 900 jobs gone at Cruise

“Today, we are making staff reductions that will affect 24% of full-time Cruisers, through no fault of their own,” said Cruise President and CTO Mo ElShenawy in a letter. “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. These impacts are largely outside of engineering, although some Tech positions are impacted also.

“As we’ve shared, our goal is to focus our work on a fully driverless L4 service that meets a new AV performance bar, prioritize the Bolt platform, relaunch ridehail in one city to start, and enhance our safety standards and processes before we scale. We are ceasing work on the Origin MY24 but not losing sight of our work on future programs. This is very different from our prior plans to expand into more than a dozen new cities in 2024.

“As a result of our decision to slow down commercialization, we are restructuring to focus on delivering the improvements to our tech and vehicle performance that will build trust in our AVs.”

For many in the industry, the cuts at Cruise had been expected for awhile, as progress within the company has been continually hampered over the last several months with no sign of improvement.

“It wasn’t a matter of if, but when,” added Charles Berg, a former auto industry advisor, to the Globe. “You wrote about all the tech layoffs in San Francisco that have happened in the past couple of years, and this was one area that was expected to stay strong. But Cruise just had problem after problem. In the letter, you just need to read between the lines to know what happened. Or look at any headline with ‘Cruise’ in it since August.

“Some of it is the companies fault, some isn’t. The media really blew some of it out of proportion, but at the same time, there were things that Cruise obviously didn’t want to bring to light that were. They’re in a fight over the marketplace right now, and this is a severe, severe setback to that. You don’t just lay off 900 people and expect to still compete at the level they were.

“Cruise is refocusing, and they aren’t done for yet. GM knows that this is the future, and they want a piece of it. But the layoffs will make things harder. Hopefully they will listen to the people in the cities now and look into why people don’t like them still to rebound from this. There isa lot of distrust of self-driving cars, especially with this and the Tesla autopilot debacle, with the latter not even being all that self-driving.

“Hopefully they can turn around in 2024.”

More on Cruise post lay-offs is due to be released soon.