Global self-driving trucking company TuSimple Holdings Inc. is reportedly set to lay off at least 700 employees next week, just before the Christmas holiday.
The San Diego-based tech company, which has operations in Arizona, Texas and China, has about 1,430 full-time employees. TuSimple executives are looking to cut that staff size by roughly half as the company scales back its efforts to build and test autonomous truck-driving systems, The Wall Street Journal reported Friday.
The layoffs would come at a tumultuous time for the company, which underwent a change of leadership in October after reports revealed that the FBI, Securities and Exchange Commission (SEC) and Committee on Foreign Investment in the U.S. (CFIUS) were each investigating TuSimple’s ties to the Chinese startup Hydron Inc.
The job cuts are expected to be announced Tuesday. The Journal reported that TuSimple will “significantly” scale back its efforts to build self-driving systems and test self-driving trucks on public roads in Arizona and Texas. “As part of the downsizing, much of TuSimple’s operation in Tucson, Ariz., where it does a lot of its test driving, will be eliminated, and the team that works on the algorithms for the self-driving software will be pared back significantly,” the report said.
FEDERAL SAFETY AGENCY PROBING CRUISE AUTONOMOUS VEHICLE INCIDENTS IN SAN FRANCISCO
TuSimple will shift focus to improving a software product that matches self-driving trucks with shippers that have freight to haul, in order to offer freight transport at a lower cost than human-driven trucks, people familiar with the company’s plans said.
FOX Business reached out to TuSimple for comment but did not receive a response.
Employees have been preparing for layoffs. TuSimple CEO Cheng Lu, who previously led the company and returned in November, emailed staff earlier this month announcing that management was reviewing “our people expenses, the biggest part of our cash burn,” the journal reported.
Lu told the Journal that he intends “to right the ship, and this includes ensuring the company is capital efficient.”
FORD, CHINSE FIRM MAY BUILD US BATTERY PLANT: REPORT
“TuSimple is cutting costs and scaling back its ambitions as it reels from a string of crises this year, including a crash of one of its self-driving trucks in April, the loss of key business partnerships, two CEO changes, a plummeting stock price and concurrent government investigations,” the report said.
The company is losing money. TuSimple reported only $4.9 million in revenue and $220.5 million in losses for the first half of 2022, according to the report. Its partnerships with other firms including Navistar International Corp. and McLane Company Inc., have also fallen apart amid the controversies.
“McLane is aware of the recent leadership, operational and route changes at TuSimple and is in communication with their team. We are in the process of assessing the business relationship with TuSimple and will determine the next course of action in due time,” McLane’s chief administrative officer Larry Parsons told the Journal.
PEDESTRIAN RUNS IN FRONT OF CAR IN SAN FRANCISCO: SEE WHAT HAPPENS
In October, TuSimple fired its chief executive and co-founder, Xiaodi Hou, after an internal board investigation found that Hou had shared confidential information with Hydron, a Chinese trucking startup that operates mostly in China and is funded by Chinese investors. Following his ouster, Hou recruited TuSimple co-founder and Hydron founder Mo Chen to strike back at the board, firing them. Together they brought back Lu to run the company, the Journal reported.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The company is now working to comply with U.S. regulators.
Source: finance.yahoo.com