Cruise Lays Off 900, Multiple Executives as Fallout Worsens
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Cruise LLC, the autonomous vehicle unit majority owned by General Motors Co., is cutting 24% of its workforce, extending a sweeping overhaul of the business after dismissing nine top executives, including Chief Operating Officer Gil West and the heads of legal and government affairs.
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Staffers were informed of the cuts, which amount to about 900 positions, in a memo Dec. 14.
The company is trying to regain the trust of regulators and the public following an investigation by California regulators into an incident in which one of its cars struck and dragged a pedestrian for 20 feet. Regulators say the company withheld a key video that showed the pedestrian under the car. The resulting regulatory scrutiny led Cruise to cut executives who managed the company’s response and to pull back operations, which resulted in layoffs.
The departure of the nine executives was announced in an internal memo sent to employees. It follows the exit of CEO Kyle Vogt and the grounding of the company’s robotaxi fleet in the three states where it was operating. The company also faces potential fines for not disclosing all details of the accident.
The memo said the executive departures were a result of the company’s analysis of the Oct. 2 incident. In addition to West, government affairs head David Estrada and Chief Legal Officer Jeffrey Bleich left, said people familiar with the matter. So did Prashanthi Raman, vice president of global government affairs.
Since having its license suspended in California in October and halting operations in Texas and Arizona, GM has taken a bigger hand in running the company. The automaker’s General Counsel Craig Glidden is now co-president along with Cruise’s Mo Elshenawy. GM CEO Mary Barra is chair of Cruise and Jon McNeill, a GM board member and executive at Tesla Inc. and Lyft Inc., is the robotaxi operator’s vice chairman.
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“The personnel decisions made today are a necessary step for Cruise to move forward as it focuses on accountability, trust and transparency,” a GM spokesman said in an email.
Cruise has hired the law firm Quinn Emanuel to investigate the company’s governance and internal processes and how management handled the incident with the pedestrian. The company also has a consulting firm called Exponent examining its technology. Results of the internal probes are expected by the end of the year.
With the job cuts, GM is also reducing its spending on Cruise, which totaled $700 million in its most recent quarter. It gives the robotaxi unit time to examine the safety of its self-driving technology and rebuild the business at a more conservative pace than it had under Vogt.
“While we remain committed to commercialization, we will approach it within a thoughtful and achievable time frame — with safety as our north star,” Cruise said in a statement Dec. 14. The decision to cut jobs “reflects our new future and a more deliberate go-to-market path, meaning less immediate need for field, commercial operations and corporate staffing.”
Barra has said GM remains committed to Cruise and developing its technology.
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