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]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Recommended: "Autonomy" movie (Car and Driver/Malcolm Gladwell) now available on Amazon Prime. Note that my recommendation to watch this movie does not imply my endorsement of any opinion, hairstyle or questionable styling decision depicted in the movie. (I apologize for the irony of posting this on an article relating to an automaker which has very little interest in actually pursuing next-gen technology - and yes I realize that something like 0.003% of GM vehicles sold in the U.S. in the past three years have been equipped with Super Cruise [based on "over 5 million hands-free miles" claim].)
In five years GM will be doing the same thing to those in their EV divisions. GM is so predictable.