Motional, the autonomous vehicle company, has recently laid off approximately 550 employees as part of its restructuring efforts. The extent of the cuts has become clearer, with every team within the company being affected. Notable departures include the chief operating officer, Abe Ghabra. The technical program management team responsible for autonomy and cloud operations has been reduced from 44 to 19 employees. Additionally, the Milpitas office in Silicon Valley and the Venice office in Los Angeles are being wound down. The high-performance computing team, including its director, has been eliminated. Motional’s remote vehicle assistance platform team has also been heavily cut, impacting employees in testing, product, safety, cybersecurity, and legal roles.
The layoffs have mostly affected the Pittsburgh office, where around 145 employees worked on software development. Motional was also testing its autonomous vehicles in California, Nevada, and Massachusetts, but no WARN notices have been filed in those states yet. Despite the cuts, the autonomy and infrastructure software teams remain largely unaffected.
One of Motional’s sources mentioned that the company still has significant improvements to make on its technology. Currently, Motional operates robotaxi rides in Las Vegas with human safety operators present at all times. In contrast, its competitor Waymo offers fully autonomous rides in several cities. Motional’s decision to focus on core technology development and de-emphasize commercial deployments is a strategic move to allocate resources effectively and increase the company’s chances of success.
Motional’s future was uncertain earlier this year when Aptiv, its joint venture partner, announced plans to reduce its ownership interest and stop allocating capital due to the high cost of commercializing a robotaxi business. However, Hyundai recently injected $475 million into Motional and acquired an 11% stake in the company. This additional investment followed a bridge loan secured by Motional in March. The layoffs were necessary for Motional to survive, as the company was already tracking to spend above its approved budget.
The severance package for laid-off employees includes a paycheck for ten weeks, with the last day of employment scheduled for July 6. Instead of a lump sum payment, employees will receive regular bi-weekly paychecks during their garden leave period. Motional has requested that employees inform the company if they find a new job before July 6 to avoid overlapping employment. Employees with vested equity will not receive immediate payout, as the share price is still pending valuation.
The layoffs at Motional reflect a larger issue in the autonomous vehicle industry, as companies struggle to sustain the high costs associated with developing and commercializing autonomous technology. The industry is far from being ready for widespread adoption and profitability. Motional’s restructuring is a necessary step to align its resources and focus on core development, ultimately increasing its chances of success in the competitive autonomous vehicle market.
