Cruise Ends Robotaxi Program, Employees 'Blindsided'

Cruise's Autonomous Driving Shift: A Reorganization Under GM

Information regarding a significant change in direction at Cruise surfaced via a Slack communication.

Marc Whitten, CEO of Cruise, who assumed the role in June, disseminated a message on Tuesday afternoon through the company’s internal announcements channel. This message included a link to a press release detailing “GM to refocus autonomous driving development on personal vehicles.”

Funding and Integration Changes

General Motors (GM), having acquired the self-driving technology company in 2016, has decided to cease further funding for Cruise. This concludes a project that had occupied the efforts of hundreds of Cruise engineers for several years.

During a subsequent all-hands meeting, Cruise personnel received further clarification. The self-driving car operation will be integrated into its parent company, GM, and consolidated with GM’s existing initiatives focused on developing advanced driver-assistance systems – and ultimately, fully autonomous vehicles for individual ownership. The impact on employment remains uncertain.

Leadership Response and Employee Reaction

The meeting, according to one insider, was brief and lacked sufficient detail. The leadership team, including Whitten, President and Chief Technology Officer Mo Elshenawy, and Chief Administrative Officer Craig Glidden, reportedly appeared as surprised by the developments as the wider workforce.

Multiple Cruise employees, speaking anonymously to TechCrunch, expressed feelings of surprise and being caught off guard by the decision. One source indicated that employees received the news concurrently with its public release by the media.

Employees were assured that their contributions were valued and that the underlying technology would continue to be utilized. They were informed of an impending restructuring process, with a transition period to GM’s operational structure expected to span several months.

Potential Restructuring and Job Security

Executives did not provide specific details regarding potential workforce reductions. However, several employees anticipate job cuts. Roles most susceptible to elimination are likely to be those not directly involved in engineering or those tied to robotaxi operations, such as government relations, communications, ground support, and remote assistance teams in cities like Phoenix, Houston, and Dallas where testing had resumed.

A source revealed that Cruise was actively pursuing a roadmap for launching a driverless service in Houston by 2025, a plan now disrupted by these changes.

From High Hopes to Strategic Shift

For years, Cruise faced pressure to achieve commercial viability with its robotaxi service and generate revenue. Initial projections were ambitious, with GM forecasting tens of thousands of custom-built Origin robotaxis generating $50 billion in annual revenue by the end of the decade.

Like many companies in the autonomous vehicle sector, Cruise was compelled to revise its timeline for these goals.

Recent Challenges and Regulatory Hurdles

Cruise secured the final permit needed from California regulators to operate commercially in San Francisco in August 2023. However, this progress was significantly hampered by an incident in October 2023, where a pedestrian was struck and dragged by a Cruise robotaxi.

This event triggered intense scrutiny, leading to the suspension of Cruise’s operating permits in California, a grounding of its U.S. fleet, the resignation of co-founder and CEO Kyle Vogt, multiple rounds of layoffs, and increased direct oversight by GM.

Recent Investments and the Origin Robotaxi

Despite these setbacks, GM provided Cruise with an $850 million investment in June to facilitate the resumption of robotaxi testing in Phoenix, Dallas, and Houston. A partnership with Uber was also established to integrate Cruise robotaxis into the Uber platform by 2025.

However, indications of a strategic shift emerged in June 2024 with GM’s decision to discontinue the Origin, a purpose-built robotaxi lacking traditional steering controls and pedals, initially unveiled in January 2020. Barra explained to shareholders that utilizing the next-generation Chevrolet Bolt would streamline the path to scalability and address regulatory uncertainties surrounding the Origin’s unique design. This decision resulted in a $583 million charge for GM in the second quarter, related to Origin assets and restructuring expenses.

Federal Safety Exemption Request

In 2022, GM submitted a request to the National Highway Traffic and Safety Administration (NHTSA) for a temporary exemption from six federal motor vehicle safety standards for the Origin. This exemption would have permitted operation of a vehicle without a steering wheel.

The FAST Act, enacted in December 2015, allows manufacturers to test vehicles that may not fully comply with existing federal motor vehicle safety standards (FMVSS). Commercial operation of the Origin required this special exemption from NHTSA.

While awaiting a decision on the exemption, development and production of the Origin continued. However, as reported by Reuters, GM withdrew its request on October 25.

Updated: This article was initially published at 6:11 p.m. PT on December 10. It has been updated to include new information concerning the company’s Origin robotaxi and its exemption request to federal safety regulators.