Self-driving truck company TuSimple to lay off 25% of its workforce – TechCrunch
Update: CEO Cheng Lu said the laid-off workers will remain on the payroll for two months and receive severance pay.
Well, we knew it was coming. Autonomous trucking technology company TuSimple confirmed Wednesday that it plans to lay off 25% of its total workforce as part of a broader restructuring plan designed to keep the company going.
The layoffs come weeks after TuSimple and Navistar ended their agreement to co-develop purpose-built autonomous tractor-trailers. The staff cuts, which we believe will affect around 350 workers, also follow a difficult year for the company, including a series of management reshuffles, multiple federal investigations, a truck accident and a stock price drop. of action. Like many other companies exploring pioneering technology, TuSimple has struggled to generate enough revenue to cover its cash burn.
“It’s no secret that the current economic environment is difficult. We need to be careful with our capital and operate as efficiently as possible,” Cheng Lu, chairman and CEO of TuSimple, said in a statement. Lu recently joined the company as CEO after being ousted earlier this year. His predecessor and TuSimple founder, Xiaodi Hou, was fired following an internal investigation that showed some employees had ties and shared confidential information with Hydron, a China-backed hydrogen trucking company.
“While I deeply regret the impact this has on those affected, I believe it is a necessary step as TuSimple continues its path to commercialization. It is part of our overall strategy to prioritize investments that bring the most value to shareholders and to position TuSimple as a customer-focused and product-driven organization.
TuSimple is in the process of selling off its Asia-focused business, so the layoffs only affect staff in the United States. TuSimple has workers in San Diego, Arizona, and Texas. It’s not yet clear which teams have been affected or whether the layoffs will affect a specific region, although a deep perception engineer in Los Angeles has previously posted on LinkedIn that he was fired. About 80% of the remaining staff work in research and development and are responsible for working on hardware and software resiliency, reliability, security and safety, TuSimple said in a statement.
The company is reducing freight expansion, including unprofitable freight lanes and respective trucking operations that still rely on previous generations of standalone software, which TuSimple says provides limited value to its ongoing technology development .
The focus is now on validating and commercializing its autonomous trucking technology by working with maritime partners, the company said. TuSimple had already received about 7,000 reservations for its Navistar trucks from customers including DHL Supply Chain, Schneider and US Xpress. It’s unclear if any of these partnerships remain or if TuSimple will have to make the rounds again. A source familiar with the matter recently told TechCrunch that TuSimple will find another truck manufacturer to work with in the future.
The restructuring will cost TuSimple approximately $10-11 million, an item that will appear on the fourth quarter balance sheet and be paid in the first quarter of 2023. TuSimple estimates that it will save $55-65 million on a annual as due to layoffs and restructuring.
At press time, TuSimple is trading at $1.42, down nearly 6% today and 96% year-to-date.
Employees will remain on the payroll for two months, as required by the WARN law, and TuSimple plans to offer severance pay on top of that, Lu told TechCrunch.
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