GM’s Cruise Sends 1,000 Souls to the Unemployment Line as Their $10bln Pipe Dream Goes Up In Flames…

And just like that, GM hit the brakes on Cruise so hard, it left skid marks on the balance sheet. The automaker just announced it’s laying off half of Cruise’s workforce—the self-driving unit that had once been hyped as the Tesla killer of robotaxis. Turns out, the only thing it killed was GM’s patience and a nice $10 billion since its acquisition in 2016. Not a typo there, Ten. Billion. Dollars. Gone. Poof. All in the name of a tech pipe dream that’s now being swept into the friggin’ dustbin. 

(Source: Giphy) 

Now of course, this mass layoff, affecting around 1,000 workers, isn’t some out-of-nowhere shocker. GM had already pulled the plug on Cruise’s robotaxi operations late last year, citing “increasing competition” and the fact that scaling this business was looking less like a road trip and more like a never-ending crawl through rush-hour gridlock. 

Which honestly, is quite unfortunate—especially considering Cruise was supposed to be GM’s moonshot. The automaker went all-in, throwing money, buzzwords, and a revolving door of executives at the self-driving dream. And for a hot second, Cruise even looked like a contender, going toe-to-toe with Alphabet-backed Waymo in the robotaxi arms race. But then the wheels started falling off—literally and figuratively—all while their robotaxi dragged a pedestrian 20 feet down a San Francisco street, it was time for GM to evaluate the regulatory overhead of it all. 

(Source: CNBC) 

So now, GM is pivoting. Instead of chasing the robotaxi holy grail, they’re “combining efforts” to focus on personal autonomous vehicles—because apparently, it’s less of a logistical and financial dumpster fire to them. Plus, Cruise is now being absorbed into GM’s broader business like a failed startup being “acquired” for parts. 

For the unfortunate souls who've been cut, the severance package looks less comforting. Sure, eight weeks’ pay and career support sound nice, but if you’re one of the 1,000 people being shown the door, it probably feels like getting a participation trophy for a game no one won. So here we are, a massive L where GM thought they could waltz into the self-driving space, throw money at the problem, and come out on top. But here’s the issue: the robotaxi market is a meat grinder. 

(Source: Bloomberg) 

Even Waymo and Cruise’s other rivals are bleeding cash like it’s a competition to see who can lose the most before their investors revolt. Meaning, building a fleet of self-driving cars that can safely navigate real-world chaos isn’t just hard—it’s borderline impossible with today’s tech.

So with that said, what’s next here? Well, GM is cutting its losses and doubling down on personal autonomous vehicles, which feels less innovative and less lucrative. The risks, of course, are lower—but so are the rewards. And again, while this pivot might help GM save face in the short term, it doesn’t erase the fact that they just spent $10 billion on a business that ended up as a massive fiasco for the ages. 

(Source: Giphy) 

Of course, the self-driving dream isn’t dead (we’re still waiting on Elon’s promises to come to fruition), but for GM, it’s definitely in the rearview mirror. Meaning, now they can continue focusing on mediocre cars as they try to keep up with the endurance and durability of Toyotas. In the meantime, place your bets accordingly, friends—and most importantly, stay safe and frosty! Until next time…

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Stocks.News holds positions in Alphabet and Tesla as mentioned in the article.