Self-driving truck company TuSimple is laying off 25% of its workforce • InNewCL
Self-driving truck company TuSimple is laying off 25% of its workforce • InNewCL
#Selfdriving #truck #company #TuSimple #laying #workforce #InNewCL Welcome to InNewCL, here is the new story we have for you today:
Click Me To View Restricted Videos
Well we knew it was coming. TuSimple, a self-driving truck technology company, confirmed Wednesday that it plans to lay off 25% of its total workforce as part of a broader restructuring plan aimed at keeping the company afloat.
The layoffs come a few weeks after TuSimple and Navistar ended their contract to jointly develop purpose-built autonomous semi-trucks. The downsizing, which we estimate will affect around 350 employees, also follows a tough year for the company, including a series of management reshuffles, multiple federal investigations, a truck accident and a stock price plunge. Like many other companies exploring pioneering technology, TuSimple is struggling to generate enough revenue to support its cash burn.
“It’s no secret that the current economic environment is difficult. We must be prudent with our capital 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 fired earlier this year. His predecessor and TuSimple founder, Xiaodi Hou, was fired after an internal investigation showed certain employees had ties and shared confidential information with Hydron, a China-backed hydrogen-powered trucking company.
“While I deeply regret the impact this is having on those affected, I believe this 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 greatest value to shareholders and to position TuSimple as a customer-centric, product-centric company.”
TuSimple is in the process of selling its Asia-focused business, so the layoffs only affect US-based employees. TuSimple has employees in San Diego, Arizona and Texas. It’s not yet clear which teams were affected or if the layoffs will hit a specific region, although a Deep Perception engineer in Los Angeles has previously posted on LinkedIn about the cut. About 80% of the remaining employees are engaged in research and development and are responsible for work on hardware and software resiliency, reliability, security and information security, TuSimple said in a statement.
The company is reducing freight expansion, including unprofitable freight lanes and related trucking operations that still rely on previous generations of autonomous software, which TuSimple says offers limited value for its ongoing technology development.
The focus now is on validating and commercializing its autonomous truck technology through collaboration with shipping partners, the company said. TuSimple had previously received around 7,000 reservations for its Navistar trucks from customers including DHL Supply Chain, Schneider and US Xpress. It’s not clear if any of these partnerships will remain or if TuSimple will have to buy again. A source familiar with the matter recently told InNewCL that TuSimple would 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 company’s fourth-quarter balance sheet and will be paid in the first quarter of 2023. TuSimple estimates it will save $55 million to $65 million annually as a result of layoffs and restructuring.
At the time of publication, TuSimple is trading at $1.42, down nearly 6% today and down 96% year-to-date. TuSimple did not respond to InNewCL’s request for comment in a timely manner.
