General Motors (GM) is laying off around half of the workforce from its discontinued Cruise robotaxi business, following its decision to shut down the segment in December. The layoffs comes nearly 2 months after the company decided to shift toward developing personal autonomous vehicles. Following the announcement yesterday, GM stock gained 1.40%.
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General Motors stock dropped over 4% on Monday after Trump imposed 25% tariffs on Mexico and Canada and 10% on China, disrupting the automobile industry. However, the tariffs on Mexico and Canada were later paused for 30 days.
GM Pivots to Personal Autonomous Vehicles
Along with the layoffs, GM confirmed that the remaining Cruise operations will be integrated into the company, redirecting its focus from robotaxis to personal autonomous vehicles. Additionally, GM announced the completion of its acquisition of GM Cruise Holdings LLC, making Cruise a fully owned subsidiary.
Since 2016, GM has poured $10 billion into its robotaxi unit, once envisioned as a major growth engine, with ambitions to generate $50 billion in revenue by the end of the decade. But, the intense competition from Alphabet’s (GOOGL) Waymo and Tesla (TSLA) led to its discontinuation.
The company also noted that as it shifts focus toward autonomous vehicles, its staffing and resource requirements have significantly evolved. According to sources cited by CNBC, Cruise had approximately 2,300 employees as of the end of 2024.
Moving ahead, the automaker expects to save up to $1 billion annually by halting its Cruise robotaxi, as revealed during the company’s fourth-quarter earnings call. Meanwhile, the company incurred a one-time charge of $500 million in Q4, following its decision to cease funding Cruise.
Is GM Stock a Good Buy Now?
Analysts remain cautiously optimistic about GM stock, with a Moderate Buy consensus rating based on eight Buys, five Holds, and two Sells. The average price target for GM is $58.8, suggesting an upside potential of 21% from its current price.
