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What just happened? The problems keep on piling up for self-driving taxi firm Cruise. After grounding its fleet, becoming the subject of multiple investigations, and more difficulties, the company has announced that it is laying off 900 employees, equivalent to 24% of its workforce, as it looks to cut costs.
Cruise, a subsidiary of General Motors, has been struggling since an accident in October that saw one of its robotaxis run over a woman, stop while she was under its wheels, and then drag her 20 feet across the road.
On Wednesday, Cruise dismissed nine more executives, including COO Gil West, policy officer Jeff Bleich and government affairs SVP David Estrada. Now, an email from new president and CTO Mo Elshenawy has given Cruise's 3,800 workers more bad news.
"We knew this day was coming, but that does not make it any less difficult – especially for those whose jobs are affected," Elshenawy wrote. Workers were informed within an hour of receiving the email if they were one of the unlucky ones going into Christmas without a job.
Affected employees will receive paychecks until February 12, plus an additional eight weeks of pay. Long-term employees will be offered an additional two weeks' pay for every year of service at Cruise beyond three years. The severance package also includes health benefits through the end of May and two months' contribution into 401(k) plans.
The layoffs will primarily target non-engineering jobs, including field workers, commercial operations, and corporate staffing. As reported by TechCrunch, the company has also ended additional assignments of contingent workers who supported its driverless operations, while the engineering department is largely being preserved.
The last 10 years have been amazing, and I'm grateful to everyone who helped Cruise along the way. The startup I launched in my garage has given over 250,000 driverless rides across several cities, with each ride inspiring people with a small taste of the future. (2/5)– Kyle Vogt (@kvogt) November 20, 2023
Following the October incident, California's DMV suspended Cruise's permit to operate driverless taxis in the state, accusing the firm of misrepresenting the safety of its vehicles. The company halted its driverless taxi operations nationwide a couple of days later to rebuild public trust, and CEO Kyle Vogt resigned in November.
Going forward, Cruise says it is committed to its work on a fully driverless L4 service, as well as relaunching ride-hailing in one city initially.