Well, we knew it was coming. Self-driving truck technology company TuSimple confirmed On Wednesday, it plans to lay off 25% of its total workforce as part of a wider restructuring plan to keep the company afloat.
The layoffs come a few weeks after TuSimple and Navistar ended their deal to co-develop purpose-built autonomous semi-trucks. The workforce cuts, estimated to affect some 350 employees, also follow a difficult year for the company that included a series of executive shakeups, multiple federal investigations, a trucking accident and a plummeting stock price. Like many companies exploring breakthrough technology, TuSimple has struggled to generate enough revenue to cover its cash burn.
“It is no secret that the current economic climate is difficult. We must manage our capital prudently and operate as efficiently as possible,” said Cheng Lu, president and CEO of TuSimple, in a statement. Lu recently rejoined the company as CEO after being ousted earlier this year. His predecessor and founder of TuSimple, Xiaodi Hou, was fired after an internal investigation found that certain employees had ties and shared confidential information with Hydron, a China-backed hydrogen transportation company.
“While I regret the impact this is having on those affected, I believe it is a necessary step as TuSimple continues on our path to commercialization. This is part of our overall strategy to prioritize investments that deliver the most value to shareholders and position TuSimple as a customer-centric, product-driven organization.”
TuSimple is in the process of selling its Asia-focused business, so the layoffs only affect US staff. TuSimple has employees in San Diego, Arizona and Texas. It’s not yet clear which teams will be affected or whether the layoffs will affect a specific region, though a Los Angeles deep perception engineer has already said so. posted on LinkedIn about being circumcised. About 80% of the remaining staff are in research and development, responsible for working on hardware and software resiliency, reliability, safety and information security, TuSimple said in a statement.
The company is shrinking its freight expansion, including unprofitable freight routes and respective transportation operations that still rely on previous generations of autonomous software, which TuSimple says offers limited value for ongoing technology development.
The focus is now on validating and commercializing its autonomous truck technology by working with shipping partners, the company said. TuSimple had previously received approximately 7,000 reservations for its Navistar trucks from clients including DHL Supply Chain, Schneider and US Xpress. It’s not clear if any of those partnerships will last, or if TuSimple will have to shop around again. A source familiar with the matter recently told businessroundups.org TuSimple would find another truck manufacturer to partner with in the future.
The restructuring will cost TuSimple approximately $10 million to $11 million, a line item that will appear on Q4’s balance sheet and be paid in the first quarter of 2023. TuSimple estimates it will save $55 million to $65 million annually as a result of the layoffs and restructuring.
At the time of publication, TuSimple is trading at $1.42, which is down nearly 6% today and 96% year-to-date. TuSimple did not respond in time to businessroundups.org’s request for comment.
