Massive Layoffs Hit a Developer Cruise
What Happened When the California Department of Motor Vehicles Shutted Cruise, and Its Promised to End, It Will Effort to Run Itself
After the incident, the California Department of Motor Vehicles suspended Cruise’s permit to operate driverless cars in the state. The company then grounded its entire fleet nationwide. It had vehicles in multiple states as well. GM decided to cut spending on Cruise and appoint its own executives to run the company after it paused operations.
Kyle Vogt and Dan Kan are two of the top executives that have left the company. Nine more executive were dismissed yesterday, including chief legal and policy officer Jeff Bleich and senior vice president of government affairs David Estrada.
Mo Elshenawy, the company’s vice president for engineering, has been promoted to president and chief technology officer. In a memo to employees today, Elshenawy struck a sober tone.
Today, we are making staff reductions that will affect 24% of full-time Cruisers, through no fault of their own. 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. We will be reducing our employee counts in operations and other areas. These impacts are largely outside of engineering, although some Tech positions are impacted also. As you might have learned, yesterday, we took action to part ways with several SLT members.
The affected employees were mostly in the company’s commercial operations division. The company was focused on doing right by the departing workers, she said.
Those who were laid off will remain on payroll through February 12th and are eligible for an additional eight weeks of pay. The extra pay is offered to long-term employees at Cruise over a three year period. Everyone will receive an end-of-the-year bonus, as well as extended medical and dental coverage, immigration support, and other benefits. The full memo was posted on Cruise’s website.
Cruise said it will eventually launch its ride hailing operations in a single city. The company will prioritize the Chevy Bolt platform it uses for its fleet, as well as indefinitely pause production of its Origin shuttle without steering wheel and pedals.
GM’s own people are being put in place to keep an eye on Cruise. Craig Glidden, who is also a Cruise board member, will serve as the automaker’s president and continue to be its chief administrative officer. Jon McNeill joined the cruise board last month, and he has been appointed vice chairman of the board.
GM has lost more than $8 billion on Cruise since it was launched in 2017, but is expecting a profit next year. In a recent call with investors, the automaker didn’t share specific cash reductions, but chief financial officer Paul Jacobson said it would likely amount to “hundreds of millions” of dollars.
Like some of its rivals, GM is not ready to pull back completely from self-driving technology. In an interview in Washington, DC, yesterday, Barra said that fully driverless cars will scale faster than a lot of people think.
Some of the challenges we just faced were not being transparent as issues happen, but rather not working with the regulators to help them understand the technology. “But the technology had already been evaluated by a third party to say it’s already safer than a human driver.”
Cruise halted testing and operations all over the US. Prior to the crash, the company was planning to launch in Houston, Dallas and Miami, among other cities.
