Cruise begins mass layoffs after a disastrous few months

15 Dec 2023

A Cruise robotaxi. Image: Cruise

Cruise has hit the brakes on its expansion plans and is cutting 24pc of its staff after multiple controversial incidents with its driverless robotaxis.

GM-owned Cruise has begun mass layoffs, after key incidents saw the company recall its entire robotaxi fleet and adjust its expansion plans.

Cruise had its driverless taxi permit suspended in the US state of California in October over safety concerns, after one of the company’s robotaxis dragged and pinned down a hit-and-run victim in San Francisco earlier that month.

The loss of this permit was followed by a full recall of its fleet, after defects were found within the company’s automated driving system software. As a result, Cruise’s plans to expand into multiple cities have been seriously impacted.

The company is cutting nearly one-quarter of its workforce, which is reportedly around 900 workers. Cruise said this decision is due to a new future for the company and a “more deliberate go-to-market path”.

In a memo released on its website, Cruise said it has less “immediate need” for field, commercial operations and corporate positions. The company recently fired various leaders of the company after an analysis of the hit-and-run incident in October, while Cruise co-founder Kyle Vogt resigned as CEO last month.

Mo ElShenawy, president and CTO of Cruise, told staff that the company plans to relaunch its ride hail services in one city to start and “enhance our safety standards and processes before we scale”.

“This is very different from our prior plans to expand into more than a dozen new cities in 2024,” ElShenawy said. “As a result of our decision to slow down commercialisation, we are restructuring to focus on delivering the improvements to our tech and vehicle performance that will build trust in our AVs [automated vehicles].

“We didn’t take any of these decisions lightly, though I know that isn’t much of a consolation if you’re someone affected by the actions we are taking today.”

Impacted employees are receiving severance packages that include severance pay, a bonus and career support.

Cruise’s robotaxi service was impacted the most by the incident in October, but the company has been plagued with controversial incidents for some time.

One week after being granted the licence to operate fully in San Francisco, one of the company’s taxis was involved in a collision with an emergency vehicle.

In September, reports from the San Francisco Fire Department claimed Cruise robotaxis blocked an ambulance that was trying to reach a critically injured patient, who later died from their injuries.

Cruise shared a detailed review of the October incident which has since been removed. In this review, Cruise claimed its AV braked aggressively after another car hit a pedestrian and flung the person in the direction of the robotaxi.

“The AV detected a collision, bringing the vehicle to a stop; then attempted to pull over to avoid causing further road safety issues, pulling the individual forward approximately 20ft,” Cruise said in the review.

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Leigh Mc Gowran is a journalist with Silicon Republic