Self-driving truck company
Update the CEO Cheng Lu said laid off employees will be on the payroll for two months and be awarded the severance.
It’s true, the company knew that was going to happen. Self-driving trucking technology company TuSimple announced that it will cut 25% of the employees as part of a larger overhaul plan that aims to ensure the company’s continued operation.
The layoffs are coming only a couple of days just after TuSimple as well as Navistar terminated their partnership to collaborate on the development of custom-designed autonomous semi-trucks. The layoffs of staff estimated to be affecting around 350 employees, are also the result of a difficult period for TuSimple, which included various executive shakeups as well as numerous federal investigation and an unintentional collision with a vehicle and a plunge in its price of its stock. Similar to other companies that are exploring the frontier of technology, TuSimple has struggled to earn enough money to pay for its cash expenses.
“It’s not a secret that the economic situation is challenging. It is imperative to be careful with our money and operate as efficiently as we can,” said Cheng Lu TuSimple’s CEO and president in an announcement. Lu recently rejoined TuSimple as the CEO following being fired earlier in the year. His predecessor and TuSimple’s founding father Xiaodi Hou, who was dismissed in the wake of an internal investigation which revealed that certain employees had relations and sharing of confidential information with Hydron the Chinese-backed hydrogen-powered trucking firm.
“While I am deeply sorry for the negative impact it has had on those who are affected but I think it’s an essential step in the meantime TuSimple is on its way towards commercialization. The reason for this is our plan in order to prioritize investments that provide the highest profit to shareholders, and also to position TuSimple to be a business that is centered on customers and driven by its products.”
TuSimple is working on selling its business focused on Asia which means that the layoffs will not affecting employees located in The U.S. TuSimple has workers who work in San Diego, Arizona and Texas. It’s unclear which departments were affected and if these layoffs are going to affect a specific area but one perception engineer from Los Angeles has already posted on LinkedIn about being laid off. Around 80% of the remaining employees are working in research and development and are accountable for work in the areas of software and hardware resilience as well as safety, reliability and security of information, TuSimple said in a statement.
The company is reducing the expansion of its freight business, which includes inefficient freight lanes as well as trucking operations that depend on the previous versions of autonomous software. This, TuSimple states is not of much benefits to its ongoing technological development.
The current focus is testing and commercializing its autonomous trucking system by working with shipping companies according to the company. TuSimple has previously had about 7700 bookings for Navistar trucks, which included customers like DHL Supply Chain, Schneider and U.S. Xpress. It’s unclear whether any of these alliances will continue or in the event that TuSimple will need to shop for a new partner. A person who is familiar with the situation recently informed TechCrunch TuSimple will find a new truck maker to partner with in the near future.
The restructuring will cost TuSimple approximately $10 million to $11 million, which is a line item that’ll appear in the balance sheet of Q4 and will be paid out during the quarter beginning in 2023. TuSimple estimates that it will reduce its expenses by $55 to $65 million annually on a basis due to the reductions in staff and restructuring.
At the time of writing, TuSimple is trading at $1.42 This is down by nearly six percent on the day and 96% for the year to date.
Employees will be on their payroll for two months, as is required under the WARN Act, and TuSimple plans to provide severance in addition, Lu told TechCrunch.