Self-driving truck company TuSimple lays off 25% of staff days before Christmas

It’s not a Merry Christmas for many employees of self-driving truck company TuSimple Holdings Inc. this year, with the company announcing that it is laying off 25% of its staff as part of a restructuring plan.

The restructuring impacts approximately 350 employees, with 80% of the company’s remaining 1,100 employees now undertaking research and development functions. One-time restructuring costs are estimated to be between $10 million and $11 million, with compensation-related restructuring savings expected to be between $55 million and $65 million annually.

As part of the restructuring plan, TuSimple plans to actively work with key shipping partners to operationalize its autonomous technology. To help ensure capital efficiency, the company also plans to scale back freight expansion, including unprofitable freight lanes and respective trucking operations. The trucking operations that use these lanes are said to use a previous generation of autonomous software that provides limited value to the company’s technology development.

Chief Executive Officer Cheng Lu, who returned to lead TuSimple last month, said he is committed to setting the company on the path toward stability and long-term success. “It’s no secret that the current economic environment is difficult,” Lu said. “We must be prudent with our capital and operate as efficiently as possible.”

The majority of the restructuring is in the company’s U..S. operations, with TuSimple also continuing to explore strategic alternatives for its business in Asia, including a possible divestiture.

Founded in 2015 with operations in Beijing, San Diego and Tucson, Arizona, the company develops artificial intelligence and computer vision technology for self-driving trucks. TuSimple went public in April 2021, raising $1.35 billion on an $8.5 billion valuation. Forward to today and TuSimple currently has a market cap of $282.85 million.

TuSimple is not alone in cutting staff in the last few months as stock markets have tanked. The likely macroeconomic outlook also includes a heavy recession as the Federal Reserve has continued to increase interest rates to bring 40-year high inflation under control.

Notable companies announcing layoffs recently include Zuora Inc., Amazon.com Inc., and Meta Platforms Inc., among nearly countless others. Winter has come to the tech industry and the only question is how long it will last.

Photo: TuSimple