Self-driving car company Cruise has announced a significant round of layoffs, with 40% of its workforce set to be let go, according to sources. The news comes two months after General Motors (GM) announced it would stop funding Cruise and instead shift its focus to advanced driver assist and personally owned autonomous vehicles.

The layoffs were announced during an all-hands meeting at Cruise, where GM's acquisition of the company was also revealed. The move marks a significant shift in GM's autonomous driving strategy, which had previously centered around Cruise's robotaxi service. However, GM CEO Mary Barra cited high costs and regulatory hurdles as reasons for abandoning the service, opting instead to focus on "privately owned" driverless cars.

The decision to lay off a significant portion of Cruise's workforce is likely to have a significant impact on the company's employees, many of whom have been in limbo for the past month as senior leadership weighed plans for the company's future. Last week, it was reported that Cruise had begun extending retention offers to some employees, primarily engineers, who are expected to take jobs at GM working on the automaker's driver assist product, Super Cruise.

GM's decision to pivot away from Cruise's robotaxi service is expected to result in significant cost savings for the company. During a recent earnings call, Barra stated that GM expects to save $1 billion annually by shutting down the service. The move is seen as a strategic shift towards more profitable and viable autonomous driving technologies.

The acquisition of Cruise by GM raises questions about the future of autonomous driving in the industry. While GM's focus on personally owned autonomous vehicles may signal a shift towards more mainstream adoption, it also highlights the challenges and uncertainties surrounding the development and deployment of self-driving car technologies.

As the autonomous driving landscape continues to evolve, the implications of GM's acquisition of Cruise and the subsequent layoffs will likely be felt throughout the industry. With major players like GM and others investing heavily in autonomous driving technologies, the stakes are high, and the future of self-driving cars remains uncertain.

For now, the fate of Cruise's remaining employees hangs in the balance, as the company's board is expected to meet in early February to announce the status of the remaining workers. As the industry watches and waits, one thing is clear: the road to autonomous driving is fraught with challenges, and even the biggest players are not immune to setbacks.