GM Lays Off Cruise Employees

Cruise, the self-driving arm of General Motors, is cutting roughly 8 percent its full-time staff as coronavirus lockdowns mar the economy and companies walk back development programs. You might have noticed the hype surrounding autonomous cars started dying down even before 2020 became the most miserable year in recent memory.

That made them prime candidates for cost-saving cuts. Health concerns have likewise made autonomous concepts like “robotaxis,” where occupants are confined together in small, self-driving shuttles, far less appetizing. Cruise actually showed off a six-passenger AV it developed and built back in January. Interested in paying to ride face to face with complete strangers?

We didn’t think so.

GM cut about 150 people from its autonomous division on Thursday, representing roughly 8 percent of Cruise’s entire workforce. According to Bloomberg, an internal memo from Cruise CEO Dan Ammann indicated that GM will offer affected staff some financial support to help them transition, plus health-care coverage through the end of the year.

“In this time of great change, we’re fortunate to have a crystal-clear mission and billions of dollars in the bank,” Cruise spokesman Ray Wert said in a statement. “The actions we took today reflect us doubling down on engineering work and engineering talent.”

Most of the cuts are said to related to business strategy, recruiting, and design. However, some of the cut staff did belong to development teams. Though this is hardly indicative of GM’s autonomous ambitions being in a worse place than its counterparts. Self-driving programs are struggling around the globe, resulting in layoffs at firms like Velodyne and Zoox.

Long-term, we expect to see the industry scale back on autonomous programs as automakers shift to prioritize core businesses. Totally abandoning AV projects seems like a stretch at this juncture, however. The industry has too much money wrapped up in their success and is presumed to want to continue encouraging their evolution. Still, new investments are bound to become less frequent (and much smaller) than they were in the past.

Cruise has idled its test fleet in San Francisco since March, complying with the government-imposed lockdown, and had a little over $2 billion in the bank at the start of this year. Unfortunately, it burns through about half that every 12 months and GM is going to be extra worried about overhead until at least 2022. More cuts seem likely but we’ll just have to wait and see.

[Images: General Motors]