Embark Trucks lays off workers, considers liquidation of self-driving truck assets

Embark Trucks, the autonomous trucking company that went public in 2021 via a merger with a special purpose acquisition company, is cutting 70% of its workforce and closing two offices. And the pain may not be over, as CEO Alex Rodrigues noted in an email to employees that the remaining 30% of workers will be focused on shutting down operations.

The company said in a regulatory filing that about 230 employees were laid off Friday. A source familiar with the plan said the cuts were announced on Friday morning. The layoffs are expected to take place in the first and second quarters.

“Unfortunately, after carefully evaluating all alternatives, we were unable to identify a way forward for the business in its current form,” Rodrigues wrote, later adding “Today, after having exhausted all alternatives, we are taking the incredibly difficult step of laying off ~70% of the company and closing our SoCal and Houston offices.

The layoffs come more than a month after banking advisory firm Evercore met with various audiovisual companies to explore the sale of Embark’s assets, a source said.

An asset sale appears to be next in line, according to a regulatory filing released Friday and Rodrigues’ email.

Embark’s board of directors on Wednesday approved “a process to explore, review and evaluate a range of potential strategic alternatives available to the company,” including alternative uses of its assets to commercialize its technology, additional sources of funding, and the potential dissolution or liquidation of its assets.

“The board’s decision comes following a thorough evaluation by the company of alternative markets in which to commercialize its technology as well as an exploration, carried out with the assistance of a financial advisor, of a sale potential of society,” the filler said.

Embark Trucks was founded in 2016 by CEO Alex Rodrigues and CTO Brandon Moak and quickly caught the attention of investors. Rodrigues and Moak met while working on self-driving technology at the University of Waterloo, where they both earned degrees in mechatronic engineering.

In 2018, the startup had raised around $47 million. But it was the SPAC boom that really brought in the capital, at least for a short time. In 2021 agreed to merge with special purpose acquisition company Northern Genesis Acquisition Corp. II in a deal valued at $5.2 billion.

Today, Embark Trucks is starved of capital like other companies trying to develop and commercialize self-driving vehicle technology. The company’s market capitalization is around $90 million; at the end of the third quarter, the last quarterly report filed by the company, it had approximately $190 million in cash and cash equivalents.

The story develops…