TuSimple Holdings laid off 350 employees — 25% of its workforce — on Wednesday, the latest blow to the autonomous trucking pioneer’s declining fortunes.
Of the approximately 1,100 employees who remain, 80% are in research and development. Many are engineers critical to hardware and software resilience, reliability, safety and information security, the company said in a news release. The biggest hit is to U.S. operations. TuSimple may sell its China operations, but it is still exploring options..
TuSimple forecast a $10 million to $11 million charge to cover severance and other benefits for those being laid off. Most of the charge will be recognized in the fourth quarter.
Scaling back freight operations
TuSimple has 97 trucks hauling freight with safety drivers monitoring autonomous software. It plans to cut back freight expansion and drop unprofitable freight lanes. Freight hauling contributes single-digit millions of dollars to TuSimple revenue quarterly.
Previous-generation software on those trucks limits ongoing technology development, the company said.
“We must be prudent with our capital and operate as efficiently as possible,” CEO Cheng Lu said. “While I deeply regret the impact this has on those affected, I believe it is a necessary step as TuSimple continues down our path to commercialization.”
Stage set with aggressive hiring after IPO
TuSimple expanded quickly after it became the first of several autonomous trucking software developers to go public. With an enterprise value of around $8 billion and a stock price around $40 a share following its initial public offering, TuSimple said it would use much of the $1.1 billion raised to hire 400 new employees.
In the 30 days since he returned to TuSimple as CEO following the firing of co-founder Xiaodi Hou, Lu has overseen with Executive Chairman Mo Chen the naming of three independent directors following the sacking of the four independent directors who fired Hou on Oct. 30.
Interim CFO Eric Tapia was named permanent CFO “to help address a number of challenges and set the company up for long-term success,” Lu said. “This required evaluating our entire workforce and making tough decisions. It’s no secret that the current economic environment is difficult.”
TuSimple shares closed Wednesday at $1.40 a share. Its market capitalization sunk to $337 million.
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