The news arrived via Slack message.
Cruz CEO Mark Whitten, who took over in June, posted a message on the company’s announcement channel Tuesday afternoon, along with a link to a press release titled “GM will refocus on autonomous development of personal vehicles.”
GM, which acquired the self-driving car startup in 2016, no longer funds the company and ended a mission that hundreds of Cruise engineers had been working on for years.
At an all-hands meeting a few minutes later, Cruise employees learned a few more details. The self-driving car company will be absorbed into parent company GM, which will combine with the automaker’s own efforts to develop driver assistance features, ultimately resulting in fully autonomous personal vehicles. It was, and still is, unclear whether their jobs would be safe or whether they would be laid off.
The meeting was brief and unsatisfactory, one source said, noting that the senior leadership team was also surprised by the turn of events. Whitten, President and CTO Mo Elshenawy, and Chief Administrative Officer Craig Glidden led the overall effort.
Several Cruise employees who spoke to TechCrunch on condition of anonymity said they were “surprised” and “blindsided” by the decision. A source told TechCrunch that employees learned about GM’s plans at the same time as the press.
Employees were told that there would be a restructuring and that Cruise’s transition to the GM team would take several months, saying they “should be proud” of themselves and that “skills will endure.”
Management did not provide details about possible layoffs, the sources said. But several employees told TechCrunch they expected job cuts. Details are sparse, but the most vulnerable roles are likely to be non-engineering roles or those involved in robotaxi operations, including government affairs, communications teams, ground operations and remote support teams in cities where Cruise has slowly resumed testing. Phoenix, Houston, Dallas.
Our sources told TechCrunch that the company was following a roadmap to launch driverless services in Houston in 2025, but did not anticipate this.
Cruises has been under pressure for years to commercialize and monetize robotaxi. And at one point, hopes and ambitions were high. By 2021, GM expects Cruise to have tens of thousands of custom Origin robotaxi on the road, which could generate $50 billion in annual revenue by the end of the decade.
The company eventually had to postpone its ambitious deadline, like many other self-driving car startups.
Cruise finally received the final permit it needed from California regulators to operate commercially in San Francisco in August 2023. Two months later, the company came under intense scrutiny after an incident on October 2 in which a pedestrian was crushed and dragged by one of the robotaxis. That incident and Cruise’s actions shortly thereafter resulted in Cruise losing its license to operate in California, grounding its entire U.S. fleet, co-founder and CEO Kyle Vogt resigning and being fired several times, and GM You have more direct control. It was once a promising self-driving startup.
Despite GM’s attempts to cut costs, all roads seemed to point toward a reboot.
Last June, GM handed Cruz an $850 million lifeline to help restart robotaxi testing in Phoenix, Dallas and Houston. Cruise also signed a partnership agreement with Uber to launch a robotaxi on the Uber platform in 2025.
