Cruise, the autonomous vehicle subsidiary of General Motors (GM), is set to undergo a significant downsizing, affecting around 25% of its workforce, approximately 900 full-time employees. The decision follows a challenging period for Cruise marked by financial losses and recent turmoil.

The majority of the job cuts will impact workers in commercial and corporate operations, as outlined in a statement on Cruise’s website. The move comes after a notable incident in October when a driverless Cruise vehicle struck a pedestrian in San Francisco. Following the incident, California regulators suspended Cruise’s driverless taxi testing permits, accusing the company of withholding information.

Mo ElShenawy, Cruise’s president and chief technology officer, acknowledged the difficulty of the decision in a memo to employees. The memo emphasized the company’s goal of streamlining operations to return with an exceptional service in a single city. However, specific details about the chosen city were not disclosed.

Impacted employees will remain on payroll until February 12, with eligibility for up to eight weeks of severance pay based on their tenure. The layoffs coincide with GM’s recent announcement of reduced spending on Cruise, anticipating a more deliberate expansion pace when operations resume, with substantially lower spending in 2024 compared to 2023.

The announcement follows a leadership shakeup at Cruise, including the departure of nine executives, including the chief operating officer, signaling broader organizational changes within the autonomous vehicle company.