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General Motors Terms Lay Off in Self-Driving Car Unit a 'Prudent' Decision Due to Covid-19 Crisis

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(Source: Reuters)

Image for Representation (Source: Reuters)

The statement comes as General Motors saw first-quarter earnings plunge and sales dry up amid COVID-19 lockdowns.

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General Motors chief Mary Barra on Friday labelled as "prudent" the automaker's plans to cut staff in its self-driving car unit. The company saw first-quarter earnings plunge and sales dry up amid COVID-19 lockdowns, and Barra confirmed reports that Cruise Automation was eliminating 160 jobs, eight per cent of the unit's staff.

"It was a very prudent action," Barra said, noting that the layoffs will not involve any technical staff dedicated to the company’s mission of developing self-driving vehicles. "They've grown very quickly," she said of Cruise, a wholly-owned subsidiary of GM, which employs 2,000 workers largely in the San Francisco Bay Area.

Workers who lose their positions will receive transition assistance and health care benefits for the remainder of the year, according to an email memo from Cruise CEO Dan Ammann. Despite the cuts, Barra said the manufacturer remains committed to autonomous technology, which also can be used to deliver packages.

"We are full speed ahead," she said. GM had stockpiled cash ahead of the pandemic and was the only one of the "Big Three" carmakers to turn a profit in the first three months of the year. US production is scheduled to resume Monday.

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