Cruise, a pioneering autonomous vehicle company, is undergoing a significant restructuring effort, laying off approximately 50% of its workforce, including its CEO and several top executives. The move comes as parent company General Motors (GM) shifts its focus towards developing personal autonomous vehicles and improving its hands-free driver assistance system, Super Cruise.

The layoffs were announced by Craig Glidden, Cruise's president and chief administrative officer, in a company-wide email. The affected individuals received a separate email from Cruise Chief Human Resources Officer Nilka Thomas. The drastic measures come nearly two months after GM announced it would no longer fund the development of a commercial robotaxi business and instead focus on building personal autonomous vehicle technology.

As a result of the restructuring, CEO Marc Whitten will depart from Cruise this week, along with Thomas, chief safety officer Steve Kenner, and global head of public policy Rob Grant. Mo Elshenawy, Cruise's chief technologist, will stay on through the end of April to assist with the transition. While the exact number of affected employees is unknown, sources estimate that over 1,000 employees might have been impacted by the layoffs, based on the company's current headcount of around 2,100.

GM expects to save up to $1 billion annually by ending its Cruise robotaxi development program, according to details shared during the company's fourth-quarter earnings call. The projected cost savings are based on the assumption that "Cruise employees will be fully integrated into GM by mid-year."

In mid-January, Cruise management started extending retention offers to employees, mostly engineers, according to sources familiar with the matter. However, employees have been in a state of limbo since GM's announcement, awaiting next steps. On Monday, Glidden sent a Slack message to employees, advising them to "plan on working from home" and promising to share "some news regarding the transition plans" the following day.

The layoffs are a culmination of the challenges Cruise has faced in recent months. In October 2023, a Cruise robotaxi was involved in an incident where it ran over a pedestrian who had been flung into its path by a human-driven vehicle. The robotaxi then dragged the pedestrian, who was stuck under the car, some 20 feet as it attempted a pullover maneuver. The incident led to the suspension of Cruise's permits to operate in California, and the company eventually grounded its entire robotaxi fleet across the U.S.

After installing new leadership, including a permanent Chief Safety Officer, Cruise was gearing up for a relaunch in Austin at the start of this year. The company had spent much of 2024 testing in Phoenix, Dallas, Houston, and the Bay Area, and beefing up its safety systems. Sources familiar with the matter told TechCrunch that the company had been ready to implement a retrofitted sensor solution, internally referred to as Project Rhino, which would have solved for the October 2 incident by creating additional visibility and awareness underneath the car.

In June 2024, GM injected another $850 million into Cruise, bringing its total spend on the company since acquiring most of Cruise's shares in 2016 close to $10 billion. The significant investment had raised hopes for the company's future, but it seems that GM's priorities have shifted towards developing personal autonomous vehicles.

The implications of this restructuring are far-reaching, with Cruise's remaining workforce set to be integrated into GM by mid-year. As the autonomous vehicle industry continues to evolve, this move marks a significant shift in focus for GM, and it will be interesting to see how this decision affects the company's future plans and the broader autonomous vehicle landscape.