The problems at Cruise have damaged GM's reputation and its ambitions in the self-driving car market. The company had hoped to generate $50 billion in annual revenue by 2030 through Cruise, but these plans have been revised. GM has also mothballed a dedicated robotaxi model called the Origin. The company admitted the job losses would be painful and said the employees were leaving "through no fault of their own."
Key takeaways:
- Robotaxi company Cruise, a subsidiary of General Motors (GM), is cutting a quarter of its workforce, eliminating 900 jobs due to financial difficulties.
- The company's troubles began after a robotaxi failed to recognize a first responder driving in the wrong lane, resulting in a collision and the loss of its license in California.
- GM has cut funding for Cruise next year by hundreds of millions of dollars, mothballed a dedicated robotaxi model called the Origin, and returned $10 billion to shareholders in the form of buybacks.
- Both CEO Kyle Vogt and chief product officer Daniel Kan have left the company, taking responsibility for the problems.