GM lays off 8% at self-driving car company
General Motors has laid off 8% of employees at its self-driving car unit Cruise.
Jane Lanhee Lee and Davis Shepardson reported the news for Reuters:
General Motors Co’s (GM.N) self-driving car unit Cruise told staff on Thursday it has decided to lay off workers, the latest start-up in the nascent industry to cut jobs during the coronavirus pandemic.
Cruise officials acknowledged they were cutting jobs, but declined to confirm the number. According to an internal email partially read to Reuters, about 8% of the staff would be cut, which amounts to more than 140 people.
The outbreak has caused funding to dry up in the autonomous driving industry. That is only the latest challenge in a sector whose promise of large-scale rollouts of so-called robotaxis has been pushed out by many years.
Sean Szymkowski from CNet wrote:
The company, which hired a vast number of new employees last year, will focus the redundancies largely on departments outside of engineering and development. Cruise did not immediately return Roadshow’s request for comment.
According to Bloomberg’s count, the company employs 2,000 workers, meaning around 160 of them will be laid off. Those affected will receive transitionary assistance and health care benefits for the remainder of the year, according to an email memo Cruise CEO Dan Ammann sent.
“These changes are the right choice for the mission,” the memo reportedly read.
The Verge’s Andrew J. Hawkins reported:
The layoffs at Cruise may come as a surprise, though, given the company’s success at raising money. Honda has said it plans to invest $2.75 billion in Cruise over 12 years. The company has also raised money from Japan’s SoftBank Vision Fund and T. Rowe Price, and has a valuation of $19 billion.
But it’s also a costly endeavor with little in the way of revenue. Cruise has disclosed it had $2.3 billion in the bank at the end of 2019, and it spends around $1 billion annually.
Cruise had idled its fleet of self-driving cars in San Francisco last March at the start of the government-imposed lockdown. Since then, the company has brought a small number of vehicles out of hibernation to do food delivery work for two Bay Area food banks.