GM subsidiary Cruise to cut 24% of workforce amid crisis following pedestrian accident
Jamie L. LaReau, Detroit Free Press
Updated 4 min read
General Motors subsidiary Cruise is cutting about 900 employees, or about a quarter of its full-time workforce, amid an ongoing investigation following an Oct. 2 accident between a Cruise self-driving car and a pedestrian.
The reduction is necessary, Cruise leaders said, as the company looks to improve safety by slowing down its commercial growth going forward. Therefore, fewer employees will be needed in a relaunch.
In a statement, Cruise said the employees being let go worked mostly in commercial operations and related corporate functions.
Cruise spokesman Erik Moser said Thursday in a statement that the company shared the "difficult" news of the cuts with its workforce and that the "changes reflect our decision to focus on more deliberate commercialization plans with safety as our north star. We are supporting impacted Cruisers with strong severance and benefits packages and are grateful to the departing employees who played important roles in building Cruise and supporting our mission.”
Memo to employees
In a memo Thursday to Cruise employees, which the company shared with the Detroit Free Press, President and Chief Technology Officer Mo Elshenawy wrote, "We knew this day was coming, but that does not make it any less difficult — especially for those whose jobs are affected. These impacts are largely outside of engineering, although some Tech positions are impacted also."
Elshenawy said in the memo — also in a blog on www.getcruise.com — that Cruise also ended additional assignments of contingent workers who support driverless operations.
"We know there’s no 'good' way to lay off employees, but treating people fairly on their way out was a key principle that guided our approach," Elshenawy wrote. "We are offering departing Cruisers pay, at minimum, through April 8, 2024 (approximately 16 weeks), plus continued subsidized health benefits, RSU (restricted stock units) vesting, the January 5 bonus, and additional immigration support for those holding work visas."
He outlined the severance package for those who received an email telling them their jobs have been eliminated. It includes the following among other benefits:
Departing employees will remain on payroll through Feb. 12 and are eligible for an additional eight weeks of pay, with long-term employees offered an additional two weeks’ pay per every year at Cruise over three years.
Bonus: All affected employees will receive their 2023 bonus.
They will get extended medical and dental coverage, immigration support and other benefits.
"This is one of the hardest days we’ve had so far because so many talented people are leaving," Elshenawy wrote. "On behalf of the (senior leadership team), the Cruise Board and GM, I’m truly grateful to everyone who has played a role in building Cruise and who has poured so much into the promise of making our roads safer and our world better."
GM has been investing in Cruise since 2016 to the tune of about $8 billion so far, the Free Press has reported. In a statement Thursday, GM spokeswoman Aimee Ridella said GM supports the difficult employment decisions made by Cruise as it focuses on safety improvements.
"We are confident in the team and committed to supporting Cruise as they set the company up for long-term success with a focus on trust, accountability and transparency," Ridella said.
Cruise leaders have said the goal is to focus on a fully driverless service, prioritizing the Bolt platform, and it will slow down its commercialization to improve safety. When it's ready to relaunch its robotaxi service, it will do so in only one city. Cruise had been operating in San Francisco, Austin, Texas, and Phoenix.
As the Free Press reported, on Oct. 2 in San Francisco, a Nissan Sentra hit a pedestrian, pushing her into the path of an oncoming Cruise driverless car. The Cruise vehicle braked hard, but hit her. The car then proceeded to drive 20 feet at 7 mph to the curb, dragging the woman and leaving her critically injured.
Since then, California regulators ordered Cruise to halt operations there. Cruise opted to stop all its operations nationwide and recall all of its 950 self-driving modified Chevrolet Bolt cars. It has hired a third party to conduct a review of the incident and Cruise's response to it.
Earlier this month, the Free Press reported that a California administrative law judge ordered Cruise to explain why it it should not be fined for "misleading" California regulators for initially failing to disclose that the car dragged the woman 20 feet before it stopped.
