Robotaxi company Cruise: half of the employees have to go
GM is closing its subsidiary Cruise, which has been developing self-driving cars. GM is only taking on around half of the employees.
(Image: Daniel AJ Sokolov)
As the self-driving cabs of GM subsidiary Cruise disappear, so do the jobs behind them. Owner General Motors (GM) is only taking on half of the approximately 2,300-strong workforce; the rest were made redundant on Tuesday.
Just under two months ago, GM pulled the ripcord on robotaxis and took the self-driving cabs off the roads. The car manufacturer sees no future for its robotaxis. Their development would be too expensive and take too long, and competition in this market is intensifying. Instead, GM wants to concentrate on the further development of driver assistance systems for privately owned cars, “on a path to fully autonomous personal vehicles”.
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However, this is to take place directly at GM, not at the subsidiary Cruise, which is being wound up. Until now, Cruise was around 90 percent owned by GM; since Tuesday, it has been 100 percent. There was an immediate Cruise-wide conference at which employees were informed of their dismissal. The company already made offers last week to those people who GM would like to continue to employ directly. Most of them are said to be developers.
By closing the Robotaxi subsidiary, GM aims to reduce its costs by one billion US dollars per year. GM has invested tens of billions in Cruise since 2016, with 1.7 billion US dollars in 2024 alone.
Chauffeurless rides were the beginning of the end
Cruise was founded in 2013 and initially launched retrofit kits for existing vehicles for limited self-driving functions on highways. From 2015, the company then worked on fully autonomous cars and received a Californian license for test drives on public roads in June of that year. GM acquired a majority stake the following year. Since then, Cruise has lost beyond ten billion US dollars. In 2023 alone, Cruise posted an operating loss of almost 3.5 billion dollars.
In August 2023, Cruise received approval in San Francisco to offer chauffeurless cab rides for a fee. However, after an accident with an emergency vehicle, the license was halved in the same month, and at the end of October the Californian authorities withdrew the operating license completely. The reason for this was an accident in which a Cruise cab dragged a pedestrian, or more precisely the company's reaction to the accident.
Cruise submitted a video from an onboard camera to the investigating authority, but apparently not all the footage. The city's fire department had previously referred to numerous incidents in which the autonomous cabs had obstructed first responders. These safety issues, combined with Cruises' inadequate openness, prompted the authority to revoke the operating license for commercial trips without a security guard.
New start not sustainable
The project never recovered from the setback. GM apologized, changed cruise management and ventured a fresh start in Phoenix, Arizona, in June. However, the autonomous journeys there were always supervised by a human at the wheel. That costs extra, of course.
In June, GM gave Cruise another cash injection of 850 million dollars and saved on the construction of electric cars. The Cruise driving area was to be gradually extended to neighboring communities in Phoenix, and the robotaxis were also on the road in Dallas and Houston. However, the technical progress is likely to have fallen short of expectations, and perhaps also the mood among the authorities and the public.
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