May 14, 2020 / 6:24 PM / 14 days ago

GM self-driving unit Cruise cuts jobs as pandemic hits sector

(Reuters) - General Motors Co’s (GM.N) self-driving car unit Cruise told staff on Thursday it has decided to lay off workers, the latest start-up in the nascent industry to cut jobs during the coronavirus pandemic.

FILE PHOTO: A Cruise self-driving car, which is owned by General Motors Corp, is seen outside the company’s headquarters in San Francisco where it does most of its testing, in California, U.S., September 26, 2018. REUTERS/Heather Somerville/File Photo

Cruise officials acknowledged they were cutting jobs, but declined to confirm the number. According to an internal email partially read to Reuters, about 8% of the staff would be cut, which amounts to more than 140 people.

The outbreak has caused funding to dry up in the autonomous driving industry. That is only the latest challenge in a sector whose promise of large-scale rollouts of so-called robotaxis has been pushed out by many years.

“In this time of great change, we’re fortunate to have a crystal clear mission and billions in the bank. The actions we took today reflect us doubling down on our engineering work and engineering talent,” Cruise spokesperson Milin Mehta told Reuters.

The cuts at Cruise, which had 1,800 full-time employees, come just a week after GM Chief Executive Officer Mary Barra said the No. 1 U.S. automaker’s commitment to Cruise was “unwavering” and it was growing the business.

“Cruise is well capitalized,” she told analysts on a May 6 conference call after GM posted stronger-than-expected first-quarter profit. “We have and will continue to grow our team by recruiting and retaining the very best engineering and leadership talent.”

The email said layoffs at Cruise include staff at an engineering team in Pasadena, California, that works on Lidar, a sensor technology that uses pulsed laser light to sense objects, similar to the way radar uses radio waves. The email was sent by Cruise CEO Dan Ammann on Thursday.

Lidar start-ups had mushroomed when self-driving car tech drew billions of dollars in investments.

The cuts at Cruise echo pain felt elsewhere in the industry.

Starsky Robotics, a five-year-old San Francisco start-up focused on automating long-haul freight delivery, closed its doors in mid-March due to lack of funding. And Zoox, a self-driving tech firm based in Silicon Valley, also has laid off staff during the pandemic.

Reporting By Jane Lanhee Lee in Oakland and David Shepardson in Washington D.C. and Ben Klayman in Detroit; Editing by Chizu Nomiyama, David Gregorio and Ben Klayman

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