Anusuya Lahiri
Thu, December 22, 2022
Autonomous driving technology company TuSimple Holdings Inc (NASDAQ: TSP) disclosed a restructuring plan to consolidate its position as a leader in the autonomous trucking industry.
The restructuring plan involves a 25% reduction of TuSimple's total workforce, equivalent to 350 employees.
About 80% of the remaining 1,100 staff are in research and development.
Also Read: TuSimple Fires Its CEO And Chair Following Internal Investigation, Draws Regulatory Scrutiny
The layoffs followed the termination of TuSimple and Navistar's deal to co-develop purpose-built autonomous semi trucks, TechCrunch reports.
TuSimple plans to actively work with crucial shipping partners and scale back freight expansion, including unprofitable freight lanes and respective trucking operations.
There was a one-time restructuring charge of $10 million - $11 million, with the majority recognized in the fourth quarter of 2022 and paid in the first quarter of 2023.
The compensation-related restructuring savings will likely be $55 million - $65 million annually.
"I returned to TuSimple as CEO to help address a number of challenges and set the Company up for long-term success. This required evaluating our entire workforce and making tough decisions. It's no secret that the current economic environment is difficult," – Cheng Lu, TuSimple President and CEO.
TuSimple had named three independent directors to the board, reconstituted its board committees, and stabilized the management team, including naming its interim CFO, Eric Tapia, as permanent CFO.
Reportedly, TuSimple looked to downsize 50% of its workforce, affecting 700 employees.
Price Action: TSP shares closed lower by 5.96% at $1.42 on Wednesday.
Self-driving truck company TuSimple to lay off 25% of workforce
Rebecca Bellan
Wed, December 21, 2022
Update: CEO Cheng Lu said laid off workers will remain on the payroll for two months and will receive severance.
Well, we knew it was coming. Self-driving trucking technology company TuSimple confirmed Wednesday it plans to lay off 25% of its total workforce as part of a broader restructuring plan designed to keep the company running.
The layoffs come a couple of weeks after TuSimple and Navistar ended their deal to co-develop purpose-built autonomous semi trucks. The staff reductions, which we estimate to affect around 350 workers, also follow a rough year for the company, including a series of executive shakeups, multiple federal investigations, a truck crash and a plummeting stock price. Like many other companies exploring pioneer technology, TuSimple has struggled to make up enough revenue to cover 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, TuSimple's president and CEO, in a statement. Lu recently re-joined the company as CEO after he was ousted earlier this year. His predecessor and TuSimple’s founder Xiaodi Hou was fired following an internal probe that showed certain employees having ties and sharing confidential information with Hydron, a China-backed hydrogen-powered trucking company.
"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. This is part of our overall strategy to prioritize investments that bring the most value to shareholders, and position TuSimple as a customer-focused, product-driven organization."
TuSimple is in the process of selling off its Asia-focused business, so the layoffs are only affecting staff in the U.S. TuSimple has workers 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 one deep perception engineer in Los Angeles has already posted on LinkedIn about being cut. About 80% of the remaining staff are in research and development and are responsible for working in hardware and software resilience, reliability, safety and information security, TuSimple said in a statement.
The company is scaling back freight expansion, including unprofitable freight lanes and respective trucking operations that still rely on previous generations of autonomous software, which TuSimple says provides limited value to its ongoing technology development.
The focus now is on validating and commercializing its autonomous trucking technology by working with shipping partners, the company said. TuSimple had previously received around 7,000 reservations for its Navistar trucks with customers like DHL Supply Chain, Schneider and U.S. Xpress. It's not clear if any of those partnerships remain, or if TuSimple will have to shop around again. A source familiar with the matter recently told TechCrunch TuSimple would find another truck-maker to work with in the future.
The restructure will cost TuSimple about $10 million to $11 million, a line item that'll show up on Q4's balance sheet and be paid in the first quarter of 2023. TuSimple estimates it'll save $55 million to $65 million on an annual basis as a result of the layoffs and restructuring.
At the time of publishing, TuSimple is trading at $1.42, which is down nearly 6% today and 96% year-to-date.
Employees will remain on the payroll for two months, as required under the WARN Act, and TuSimple plans to offer severance on top of that, Lu told TechCrunch.
Wed, December 21, 2022
Update: CEO Cheng Lu said laid off workers will remain on the payroll for two months and will receive severance.
Well, we knew it was coming. Self-driving trucking technology company TuSimple confirmed Wednesday it plans to lay off 25% of its total workforce as part of a broader restructuring plan designed to keep the company running.
The layoffs come a couple of weeks after TuSimple and Navistar ended their deal to co-develop purpose-built autonomous semi trucks. The staff reductions, which we estimate to affect around 350 workers, also follow a rough year for the company, including a series of executive shakeups, multiple federal investigations, a truck crash and a plummeting stock price. Like many other companies exploring pioneer technology, TuSimple has struggled to make up enough revenue to cover 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, TuSimple's president and CEO, in a statement. Lu recently re-joined the company as CEO after he was ousted earlier this year. His predecessor and TuSimple’s founder Xiaodi Hou was fired following an internal probe that showed certain employees having ties and sharing confidential information with Hydron, a China-backed hydrogen-powered trucking company.
"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. This is part of our overall strategy to prioritize investments that bring the most value to shareholders, and position TuSimple as a customer-focused, product-driven organization."
TuSimple is in the process of selling off its Asia-focused business, so the layoffs are only affecting staff in the U.S. TuSimple has workers 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 one deep perception engineer in Los Angeles has already posted on LinkedIn about being cut. About 80% of the remaining staff are in research and development and are responsible for working in hardware and software resilience, reliability, safety and information security, TuSimple said in a statement.
The company is scaling back freight expansion, including unprofitable freight lanes and respective trucking operations that still rely on previous generations of autonomous software, which TuSimple says provides limited value to its ongoing technology development.
The focus now is on validating and commercializing its autonomous trucking technology by working with shipping partners, the company said. TuSimple had previously received around 7,000 reservations for its Navistar trucks with customers like DHL Supply Chain, Schneider and U.S. Xpress. It's not clear if any of those partnerships remain, or if TuSimple will have to shop around again. A source familiar with the matter recently told TechCrunch TuSimple would find another truck-maker to work with in the future.
The restructure will cost TuSimple about $10 million to $11 million, a line item that'll show up on Q4's balance sheet and be paid in the first quarter of 2023. TuSimple estimates it'll save $55 million to $65 million on an annual basis as a result of the layoffs and restructuring.
At the time of publishing, TuSimple is trading at $1.42, which is down nearly 6% today and 96% year-to-date.
Employees will remain on the payroll for two months, as required under the WARN Act, and TuSimple plans to offer severance on top of that, Lu told TechCrunch.
No comments:
Post a Comment