General Motors (GM) has announced that it will no longer fund Cruise, its autonomous vehicle subsidiary, and instead shift its focus to developing driver assistance features and fully autonomous personal vehicles. The news was revealed in a Slack message from Cruise CEO Marc Whitten, followed by an all-hands meeting where employees learned that their jobs may be at risk.

The decision marks a significant pivot for Cruise, which was acquired by GM in 2016. Hundreds of engineers had been working on the autonomous vehicle project, with the goal of launching a commercial service. However, despite receiving an $850 million lifeline from GM in June, the project has struggled to gain traction.

Employees were reportedly "surprised" and "blindsided" by the decision, with some learning about GM's plans at the same time as the media. During the all-hands meeting, executives provided few details about potential layoffs, but sources suggest that non-engineering roles and those related to robotaxi operations may be the most vulnerable.

Cruise had been under pressure to commercialize its robotaxis and generate revenue, with GM initially projecting $50 billion in annual revenue by the end of the decade. However, the company was forced to push back its deadline, and its progress was further hampered by an incident in October that left a pedestrian stuck under one of its robotaxis.

The incident led to Cruise losing its permits to operate in California, grounding its entire U.S. fleet, and the departure of its co-founder and CEO Kyle Vogt. GM subsequently took more direct control over the company, and in June, it announced that it would shelve the Origin, a custom-built robotaxi with no steering wheel or pedals.

The decision to scrap the Origin and instead use the next-generation Chevrolet Bolt in its operations was seen as a way to "simplify their path to scale" and address regulatory uncertainty. GM took a $583 million charge in the second quarter related to Origin assets and other restructuring costs.

In 2022, GM had requested a temporary exemption from six federal motor vehicle safety standards for the Origin vehicle, but withdrew its request in October. The company had been waiting on the exemption to launch a commercial service with the Origin, but its decision to pivot to personal vehicles suggests that it may have been unable to overcome the regulatory hurdles.

The implications of GM's decision are significant, not only for Cruise employees but also for the broader autonomous vehicle industry. The shift in focus to personal vehicles may indicate a more realistic approach to autonomous technology, but it also raises questions about the viability of robotaxi services in the near future.

As the autonomous vehicle industry continues to evolve, GM's decision serves as a reminder of the challenges and uncertainties that remain. While Cruise's technology may "live on" in some form, the company's absorption into GM's efforts marks a significant setback for the development of commercial autonomous vehicle services.