Moved to cut about 550 jobs, about 40 percent, in recent restructuring, sources say

About 550 workers at autonomous vehicle company Motional have been laid off, according to information obtained from WARN filings and sources.

Earlier this week, TechCrunch reported that Motional is suspending its commercial operations and delaying plans to launch a robotaxi service with the next-generation Hyundai Ioniq 5 robot taxi until 2026 as it undergoes restructuring. Now, we have more clarity on how deep the cuts are.

A Motional employee who spoke to TechCrunch on condition of anonymity said every team has been affected, with high-level departures, including the company’s CEO, Abe Ghabra.

The technical program management team dealing with autonomy and cloud operations has been cut from 44 to 19, the source said. The Milpitas office in Silicon Valley — which housed a portion of Motional’s computing design team — is also being phased out, two sources confirmed. Sources also confirmed that the high-performance computing team has been eliminated, including its director, David Fermor. Venice’s Los Angeles office — which was a small business and commerce hub that made deliveries for Uber Eats — is also going down, sources say.

TechCrunch has also learned that the team behind Motional’s remote vehicle assistance platform has been largely cut. Employees who worked in testing, product, security, cybersecurity and legal teams were also affected. In a statement, the company noted that all functions of the business received staff cuts.

About 145 of the laid-off employees were from Pittsburgh, according to a WARNING notice was filed with the Pennsylvania Department of Labor and Industries this week. Most of the employees in Pittsburgh worked in software, according to a source familiar with the matter. Motional was also being tested in California, Nevada and Massachusetts, but WARN notices in those states have not yet been filed.

A source said the autonomy and infrastructure software teams were not affected enough. However, Motional has a smaller workforce to help improve its core technology and business model while maintaining the limited capital it has left.

One of Motional’s sources told TechCrunch that the company has a lot of improvements to make to its technology. Until this week, Motional was running robotaxi rides in Las Vegas on the Uber and Lyft networks and delivering to Uber Eats customers in Santa Monica. At all times, a human safety operator was behind the wheel, in addition to another expert in the passenger seat to manually record any problems. Meanwhile, Motional’s main competition Waymo offers fully autonomous routes in Phoenix, San Francisco and Los Angeles.

Motion did not comment on any of the details in this article, but offered the following statement: “We have updated our strategic plan to focus resources on the continued development and generalization of core driverless technology while de-emphasizing short-term commercial deployments and ancillary activities. This updated strategy requires streamlining our teams, resulting in staff reductions across all business functions. The team members who are leaving Motional have our deepest appreciation for their contribution to our goals.”

Hyundai investment

Motional was originally the product of a $4 billion joint venture between Hyundai and automotive supplier Aptiv. The company’s future was thrown into doubt earlier this year when Aptiv announced plans to reduce its ownership stake and stop allocating capital to the venture due to the high cost of commercializing a robotaxi business and the long road to profitability. Aptiv expects to reduce its equity stake in Motion from 50% on March 31 to about 15%, leaving Hyundai with the remaining control.

A week ago, Hyundai raised Motional with a $475 million round and spent another $448 million to buy Aptiv’s 11% common equity in the company. This follows a bridge loan that Motional secured in March as a hedge against that other investment to buy some time after laying off 5% of staff a few weeks ago.

The layoffs at Motional are a sign of challenges in the self-driving car industry, as fewer companies can continue to spend billions of dollars on a technology that is far from ready for prime time and even further from breaking even.

More details about the layoff

A fired employee told TechCrunch that those affected will continue to receive pay for 10 weeks with their last day scheduled for July 6. Instead of a lump sum payment, laid-off employees will receive something called “garden leave,” meaning they’ll be paid every two weeks like a regular salary, according to an off-boarding slide deck seen by TechCrunch.

Workers will also receive an additional 28.5% bonus on top of the 20% bonus they received in March.

Motion asked employees to notify the company if they find a new job before July 6 in order to “avoid overlapping employment.”

Employees with equity vested in March 2024 will not be able to be paid immediately because Motional is still awaiting its valuation to determine the new share price, per deck.

Fix: Information about some aspects of the strictness, specifically the bonus amount was incorrectly listed as only 28.5% when it was actually an additional 28.5%.