Motional reduction of about 550 employees, or about 40%, in recent restructuring, sources say

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

Earlier this week, TechCrunch reported that Motional was suspending commercial operations and delaying its plan to launch a robotaxi service with its next-generation Hyundai Ioniq 5 robotaxis until 2026 as it is undergoing restructuring. We now know more clearly how deep the reductions are.

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

The technical program management team responsible for autonomy and cloud operations was reduced from 44 to 19 people, the source said. The Milpitas office in Silicon Valley — which housed a division of Motional’s IT design team — is also being closed, 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 sales center making deliveries for Uber Eats – is also being closed, according to sources.

TechCrunch has also learned that the team behind Motional’s remote vehicle assistance platform has been significantly reduced. Employees who worked in testing, product, security, cybersecurity, and legal teams were also affected.

About 145 of the laid-off employees were from Pittsburgh, according to a WARN notice filed this week with the Pennsylvania Department of Labor and Industry. Most of the Pittsburgh employees 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.

A source said the autonomy software and infrastructure teams were largely unaffected. That appears to leave Motional with a ragtag group to help it improve its core technology and business model while conserving the limited capital it has left.

One of Motional’s sources told TechCrunch that the company has many improvements to make to its technology. Until this week, Motional ran robotaxi rides in Las Vegas on the Uber and Lyft networks and delivered to Uber Eats customers in Santa Monica. At all times, a human safety operator was behind the wheel, along with another specialist sitting in the passenger seat to manually record any issues. Meanwhile, Waymo, Motional’s main competitor, offers fully autonomous rides in Phoenix, San Francisco and Los Angeles.

Motional did not initially respond to TechCrunch’s request for comment.

Major budget 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 thrown into doubt earlier this year when Aptiv announced plans to reduce its stake and stop allocating capital to the company due to the high cost of bringing a business to market robotaxi and the long road to profit. Aptiv plans to reduce its stake in Motion from 50% as of March 31 to about 15%, leaving Hyundai with the rest of control.

A week ago, Hyundai invested in Motional with a $475 million seed round and spent another $448 million to buy 11% of Aptiv’s common stock in the company. This follows a bridging loan that Motional secured in March to replace that other investment to buy time after laying off 5% of staff just weeks before.

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

One employee also said Motional was only paying partial bonuses for 2023 performance – a slide presentation put that figure at as much as 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 continue spending billions of dollars on technology that is far from ready for use in prime time and even further from breaking even.

More details on severance pay

An employee who was laid off told TechCrunch that those affected will continue to receive a paycheck for 10 weeks, with their last day scheduled for July 6. Rather than a lump sum payment, laid-off employees will get what’s called “gardening leave,” meaning they’ll be paid every two weeks like a normal paycheck, according to a departure slideshow viewed by TechCrunch.

This could give Motional a chance to save some money on severance costs. Motional asked employees to alert the company if they find a new job before July 6 to “avoid overlapping employment.”

Employees whose shares vested in March 2024 will not be able to be paid immediately because Motional is still waiting for its valuation to determine the new share price, according to the deck.