Motional cut about 550 employees, around 40%, in recent restructuring, sources say

Around 550 employees across autonomous vehicle company Motional have been laid off, according to information taken from WARN notice filings and sources at the company. 

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

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

The technical program management team that deals with autonomy and cloud operations has been cut from 44 to 19, the source said. The Milpitas office in Silicon Valley — which was home to a division of Motional’s compute design team — is being wound down, as well, two sources confirmed. Sources also confirmed that the high-performance computing team has been eliminated, including its director, David Fermor. The Venice office in Los Angeles — which was a small operations and commercial hub doing deliveries for Uber Eats — is also being wound down, sources say.

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

Around 145 of the laid-off employees came from Pittsburgh, according to a WARN notice filed with Pennsylvania’s Department of Labor and Industry this week. Most of the employees in Pittsburgh worked on software, according to a source familiar with the matter. Motional was also testing in California, Nevada and Massachusetts, but WARN notices in those states have not yet been filed. 

One source said the autonomy and infrastructure software teams were pretty unaffected. That appears to leave Motional with a rag-tag bunch to help improve its core technology and business model while holding onto what limited capital it has left. 

One of the sources at Motional told TechCrunch the company has a lot of improvements to make on its technology. Until this week, Motional had been 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 had been behind the wheel, in addition to another specialist in the passenger seat to manually log any issues. Meanwhile, Motional’s main competition Waymo is offering fully autonomous rides in Phoenix, San Francisco and Los Angeles.

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

Major cuts needed to survive

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

A week ago, Hyundai pumped Motional with a $475 million round and spent another $448 million to buy 11% of Aptiv’s common equity interest in the company. This follows a bridge loan that Motional secured in March as a stand-in to this other investment to buy some time after laying off 5% of staffers a couple weeks prior. 

One source at Motional told TechCrunch that in August 2023, the company was already tracking to spend 7% above its approved budget, so it’s possible the saving grace from Hyundai wouldn’t have been enough to keep the startup alive without significant cuts. 

One employee also said that Motional was paying only partial bonuses for 2023 performance — one slide deck put the number at up to 28.5%.

The layoffs at Motional are a sign of a much bigger problem in the autonomous vehicle industry, as fewer companies are able to keep spending billions of dollars on a technology that is far from ready for prime time and even further away from breaking even.

More details on severance

One employee who was laid off told TechCrunch those affected will continue to get a paycheck for 10 weeks with their last day slated for July 6. Rather than a lump sum payment, laid-off employees will get something called “garden leave,” which means they’ll be paid every two weeks like a normal paycheck, according to an off-boarding slide deck that TechCrunch has viewed. 

This might give Motional a chance to save a little money on severance. Motional has asked employees to alert the company if they find a new job before July 6 in order to “avoid overlap in employment.”

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