The news came to me via Slack message.
Cruise CEO Mark Whitten, who took the top post in June, posted a press release on the company’s announcement channel Tuesday afternoon titled “GM Refocuses on Developing Autonomous Driving in Private Cars.” posted a message with a link.
GM, which acquired the self-driving car startup in 2016, will now cut funding to the company, ending a mission that hundreds of cruise engineers have worked on for years.
Minutes later, during an all-hands meeting, Cruise employees learned a few more details. The self-driving car company will be absorbed by parent company GM and integrated with the automaker’s own efforts to develop driver-assistance features, ultimately leading to the development of fully self-driving personal vehicles. It was and remains unclear whether their jobs will be made safer or reduced.
One source said the meeting was short and unsatisfactory, but the senior leadership team also said they were surprised by the turn of events. Mr. Witten, President and Chief Technology Officer Mo El-Shenawy, and Chief Administrative Officer Craig Glidden all led the company.
Several cruise employees who spoke to TechCrunch on condition of anonymity said they were “surprised” and “dazzled” by the decision. A source told TechCrunch that employees learned about GM’s plans at the same time the media did.
Staffers were told they “should be proud” and that “technology lives on,” noting that restructuring would take place and that it would be several months before Mr. Cruz transitioned to GM’s team.
Executives did not provide details about the potential layoffs, the people said. However, several employees told TechCrunch that layoffs are expected. Details are not clear, but the most vulnerable are related to non-engineering roles and robotaxi operations, including government affairs, communications teams, ground operations, and remote assistance teams in cities where cruises are gradually resuming testing. It is highly likely that the role is to Phoenix, Houston, Dallas.
Our sources told TechCrunch that the company was following a roadmap to launch driverless services in Houston in 2025, but this was not expected.
Cruise has been under pressure for years to commercialize robotaxis and generate revenue. And at some point, hopes and ambitions were growing. In 2021, GM predicted that Cruise could have tens of thousands of custom-built Origin robotaxis on the road, generating $50 billion in annual sales by the end of the decade.
The company, like many other self-driving car startups, was ultimately forced to postpone its ambitious deadline.
Cruise finally received the final permit required by California regulators to operate commercially in San Francisco in August 2023. Two months later, the company came under intense scrutiny after an incident occurred on October 2nd in which a pedestrian was crushed under and dragged by a robot taxi. This incident and Cruise’s actions in the immediate aftermath resulted in the company losing its license to operate in California, grounding its entire U.S. fleet, and the resignation of co-founder and CEO Kyle Vogt. A series of layoffs took place, giving GM more direct management control. It was once a promising self-driving startup.
All roads seemed to be pointing toward a reboot, even as GM tried to keep costs down.
In June, GM handed Cruise an $850 million lifeline to help restart robotaxis testing in Phoenix, Dallas and Houston. Cruise also signed a partnership agreement with Uber to launch robotaxis on the Uber platform in 2025.
