Cruise Cuts 900 Jobs Amidst Regulatory Scrutiny

Self-driving car firm Cruise has said it is to cut more than 900 jobs, about one-quarter of its workforce, as it refocuses amidst an official inquiry into a fatal accident in San Francisco.

The firm, majority ownewd by General  Motors, earlier last week was reported to have dismissed nine key executives in the fallout from the regulatory probe, including chief operating officer Gil West.

Former chief executive Kyle Vogt and chief product officer and co-founder Daniel Kan have also resigned in recent weeks.

Cruise president and chief technical officer Mo ElShenawy announced the layoffs to the firm’s 3,800 staff in a letter in which he said the company was slowing down the productisation of its self-driving technology.

‘Simplifying and focusing’

“We are simplifying and focusing our efforts to return with an exceptional service in one city to start with,” ElShenawy wrote.

“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,” he wrote, referring to autonomous vehicles.

Cruise said the cuts would be “primarily in commercial operations and related corporate functions” and that staff would be supported with “strong severance and benefits packages”.

In August the California state utilities regulator approved Cruise and Waymo to expand the commercialisation of their operations in San Francisco, charging fares for driverless rides at any time of day.

Regulatory probes

But on 2 October a pedestrian who had been hit by another car was flung into the path of a Cruise vehicle and then dragged beneath the AV as it manoeuvred 20 feet to the curb.

The California Department of Motor Vehicles removed Cruise’s licence to operate in the state and the National Highway Traffic Safety Administration (NHTSA) announced an investigation into the company’s fleet.

California regulators are also probing the firm, alleging that Cruise initially covered up some of the more grisly details of the October accident, and could fine the firm $1.5 million (£1.2m).

Cruise said it would pause all driverless operations for a review by independent experts and recalled all of its 950 vehicles for a software upgrade.

Heavy losses

In November GM said it planned to cut costs at Cruise, which has lost more than $8bn since 2016, including $1.9bn in losses for the first nine months of this year.

The driverless service had originally planned to generate $1bn in revenue by 2025 and to expand to other cities beyond San Francisco.