GM’s Cruze company plans to cut 24% of its workforce after a pedestrian accident

GM’s Cruze company plans to cut 24% of its workforce after a pedestrian accident

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General Motors’ Cruise subsidiary has decided to lay off about 900 employees, or about a quarter of its full-time workforce, amid an ongoing investigation following an Oct. 2 accident between a self-driving Cruise car and a pedestrian.

Cruise leaders said the reduction is necessary as the company looks to improve safety by slowing its commercial growth in the future. Therefore, fewer employees will be needed in the restart process.

The laid-off employees mostly worked in business operations and related company functions, Cruz said in a statement.

Cruise spokesman Eric Moser said Thursday in a statement that the company shared the “difficult” news of the cuts with its workforce and that “the changes reflect our decision to focus on more intentional marketing plans with safety as our north star. We support those impacted.” Cruisers with strong compensation and benefits packages We are grateful to the departing employees who played important roles in building Cruise and supporting our mission.

Memo to employees

In a Thursday memo to Cruise employees, which the company shared with the Detroit Free Press, President and Chief Technology Officer Mohamed El-Shenawy wrote: “We knew this day would come, but that doesn’t make it any less difficult — especially for those whose jobs these impacts largely fall on.” Outside of engineering, though some technical positions are also affected.

El-Shenawy said in the memo — also in a blog post at www.getcruise.com — that Cruise also ended additional tasks for contingent workers who support driverless operations.

“We know that there is no ‘good’ way to lay off employees, but treating people fairly while they are out of work has been a fundamental principle that has guided our approach,” El-Shenawy wrote. “We are offering wages for departing cruisers, at least, through April 8, 2024 (about 16 weeks), as well as ongoing subsidized health benefits, RSU (restricted stock units) vesting, a January 5 bonus, and additional immigration support for those on work visas.”

He outlined a severance package for those who received an email telling them their jobs were being cut. It includes the following among other benefits:

  • The departing employees will remain on the payroll until February 12 and are eligible for an additional eight weeks of pay, with two additional weeks of pay being offered to employees each year at Cruise over three years.
  • Bonus: All affected employees will receive their bonuses for 2023.
  • They will receive expanded medical and dental coverage, immigration support and other benefits.

“This is one of the most difficult days we have gone through so far because a lot of talented people are leaving,” El-Shenawy wrote. “On behalf of the (Senior Leadership Team), the Cruise Board and GM, I am truly grateful to everyone who played a role in building Cruise and who have poured so much into the promise of making our roads safer and our world better.” “.

GM stands by the move

This latest development comes after Cruz confirmed on Wednesday that nine senior leaders have “departed from Cruz” as a result of the ongoing safety investigations and their aftermath. Last month, Kyle Vogt, co-founder and CEO of Cruise, resigned after the incident.

GM has been investing in Cruze since 2016, amounting to about $8 billion so far, the Free Press reported. In a statement Thursday, GM spokeswoman Amy Ridella said GM supports the difficult hiring decisions made by Cruise as they focus on safety improvements.

“We are confident in the team and committed to supporting Cruz in setting the company up for long-term success with a focus on trust, accountability and transparency,” Ridella said.

Cruise leaders said the goal is to focus on fully self-driving service, prioritizing the Bolt platform, and will slow its commercialization to improve safety. When it is ready to relaunch its robotaxi service, it will do so in just one city. Cruz has been working in San Francisco, Austin, Texas and Phoenix.

As the Free Press reported, on October 2 in San Francisco, a Nissan Sentra struck a pedestrian, pushing it into the path of an oncoming driverless Cruze. Cruz’s car braked hard but crashed into it. The car then proceeded to travel 20 feet at 7 mph to the curb, dragging the woman and leaving her seriously injured.

more: GM CEO Barra discusses what she sees as a “game changer” at GM and her future at GM

more: Nine people have been released from Cruz amid ongoing investigations into a pedestrian accident

California regulators have since ordered Cruise to cease operations there. Cruise has chosen to halt all operations across the country and recall all 950 of its modified self-driving Chevrolet Bolt vehicles. It has appointed a third party to conduct a review of the incident and Cruz’s response.

Earlier this month, the Free Press reported that a California administrative law judge ordered Cruz to explain why he should not be fined for “misleading” California regulators by initially failing to disclose that the car had pulled the woman 20 feet before it stopped.

Contact Jimmy L. Lareau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more about GM and subscribe to our automotive newsletter. Become a subscriber.

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