Trouble-ridden self-driving trucking startup TuSimple to cut 50% of its workforc...

Trouble-ridden self-driving trucking startup TuSimple to cut 50% of its workforce

Trouble-ridden self-driving trucking startup TuSimple to cut 50% of its workforce

3 hours ago

Self-driving trucking company TuSimple plans to cut potentially at least half of its workforce next week, Wall Street Journal reported on Dec. 16, citing people familiar with the matter.

At least 700 employees will be affected, and the cuts could go deeper, according to the source. As of June, the startup, with dual operations in China and the US, has 1,430 full-time employees. 

As part of the downsizing, much of TuSimple's operations in Tucson, Arizona, where it does a lot of test driving, will be eliminated, while the team that works on self-driving software algorithms will also be significantly reduced, the source said.

The company will focus on building out a software product that matches self-driving trucks with shippers that have freight to haul, with the aim of offering freight transport at a lower cost than human-driven trucks. TuSimple does not manufacture trucks itself, but works with the freight companies and truck manufacturers to train its the autonomous software.

When asked for comment on the planned layoffs, Cheng Lu, TuSimple's current president and CEO, said he intends to "right the ship, and that includes  ensuring the company is capital efficient.”

The company told employees that offices would be closed on Tuesday and Wednesday, and layoffs were expected to be announced on Tuesday.

In recent months, the company has experienced a string of dramas that have had a significant impact on operations.

In August, WSJ broke the news that TuSimple tried to pass off its self-driving truck crash in April as ‘human error’, raising concerns among the public that the company was risking safety on public roads in a rush to deliver driverless trucks to market.

In October, TuSimple removed its then-chief executive, Xiaodi Hou, after an investigation by its board revealed that the startup had improper cash and intellectual property dealings with Hydron during his tenure. Founded in June this year by TuSimple co-founder Mo Chen, Hydron is a startup primarily working on self-driving hydrogen-powered trucks in China.

After being ousted, Hou joined forces with Chen to fire the board, and brought Cheng Lu back to run the company in Nov. Chen now controls the company with 59% of the voting power, while Hou has 30%, according to securities filings.  Restoring Lu, a former investment banker who led the company public with former CFO Pat Dillon in April 2021, is an attempt to stabilize the company. 

This month, TuSimple and Navistar said they had jointly ended a two-year-old partnership. TuSimple had planned to incorporate its self-driving systems into Navistar trucks that would be sold to freight haulers starting in 2025. 

TuSimple's revenue has been disappointing because its truck self-driving solution is still in its early stages. For the first half of the year, it reported a loss of $220.5 million on $4.9 million in revenue.

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