GM’s Autonomous Driving Unit Job Cuts
General Motors has decided to cut jobs in its autonomous driving unit “Cruise” by 24% following an incident that led to a suspension of its operations by regulators. The layoffs will affect about 900 workers, who will remain with the company until February 12. Cruise’s CEO, Mo Shanaou, indicated that the reductions were necessary to support the unit in the long term.
GM’s Focus on Cost Reduction and Other Projects
In a memo, CEO Mo Shanaou noted that the company is reducing its workforce by 900 employees, or 24%, to cut costs and focus on other projects. The co-founder and former CEO Kyle Vogt and chief product officer Dan Kan resigned last month. Shanaou and GM’s general counsel Craig Glidden have been appointed to lead the unit and report to the board.
Simplifying Cruise’s Efforts and Focusing on Exceptional Service in One City
Shanaou clarified that Cruise is simplifying its efforts and focusing on providing exceptional service in one city to start. He added that the company will look at its EV Bolt platform as a first step “before we expand.” Cruise has faced difficulties since an incident in San Francisco, California that led to the suspension of its deployment and autonomous testing licenses by the state’s Department of Motor Vehicles.
Justifying Layoffs for Long-Term Establishment of Cruise
Shanaou stated that he and Glidden believe the layoffs were a necessary step “to establish Cruise for the long term.” He mentioned that those laid off will remain on payroll until February 12. GM’s shares rose 6.7% on Thursday to $36.25, marking its highest close since early August. The stock has increased by 7.2% over the year.
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Article Sources: “Cruise Team Updates,” Reuters. “GM Cruise co-founder, senior exec Dan Kan quits day after CEO exit,” The Verge. “Cruise lays off nearly a quarter of its staff after grounding its robotaxi fleet,” California Department of Motor Vehicles. “DMV STATEMENT ON CRUISE LLC SUSPENSION.”
Source: https://www.investopedia.com/gm-shares-jump-here-is-why-8416291
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