General Motors (NYSE:GM) is shrinking the workforce at its self-driving unit, Cruise, by 24% or 900 employees, primarily impacting commercial operations and corporate roles. This follows the recent departure of nine key executives amid an ongoing safety investigation.
General Motors’ self-driving ambitions took a hit in October 2023 when a pedestrian was dragged 20 feet by a Cruise self-driving car after being struck by another vehicle. The accident led to the suspension of its driverless permits in California, and the company put its nationwide operations on hold. Moreover, the unit’s CEO Kyle Vogt resigned from his post last month.
The recent job cuts mark a strategic shift for Cruise, prioritizing cost control and refocusing on safety enhancements and Level 4 autonomous driving technology development. These developments reflect a major setback for the company, which earlier disclosed plans to deploy cars in several cities. Also, its previously stated revenue target of $1 billion by 2025 appears challenging in current conditions.
Is GM a Good Stock to Buy?
Setting aside the struggles in its Cruise unit, General Motors is faring well in other businesses. The company remains committed to its aggressive electric vehicle (EV) market penetration strategy. This is reflected in its ongoing investment in constructing new plants and expanding its diverse lineup of electric vehicles.
Wall Street analysts have a Moderate Buy consensus rating on General Motors based on 14 Buys, four Holds, and one Sell. The average price target of $45.91 per share implies 26.7% upside potential. Shares of the company have gained about 8% so far in 2023.
