TuSimple to lay off 30% of workforce, keep China business
TuSimple, the once high-flying autonomous trucks company that went public in 2021, is restructuring and laying off about 30% of its global workforce as it works to preserve cash and stay in business.
All of the layoffs will occur in TuSimple's U.S. workforce. “Prior to the layoff, TuSimple had about 550 employees in the U.S. and post reduction in force the company will have about 220, according to the company.
"We believe this is the right number of employees to work toward achieving our goals while preserving the cash on our balance sheet as well as retain strong publicly listed company capabilities,” according to an emailed statement from TuSimple.
The announcement early Thursday comes a week after the company disclosed that it received a delisting notice from the Nasdaq for failing to file its quarterly report on time. TuSimple hasn’t filed a quarterly report for the fourth quarter or full-year results. It last reported earnings for the quarter ended September 30. It also said Thursday it will not be able to file first-quarter earnings in a timely manner.
Shares were up more than 14% following the disclosure.
TuSimple was supposed to be delisted May 15, but was able to get a temporary reprieve from Nasdag as a panel at the exchange reviews its case.
This is the second restructuring in five months. TuSimple laid off 25% of its workforce in December, a couple of weeks after the company's deal to co-develop purpose-built autonomous semi trucks with Navistar fell apart.
The company also said Thursday that it plans to keep its Chinese-based subsidiaries and is no longer exploring a sale. TuSimple noted that these subsidiaries "have continued to make progress working with several OEMs on Level 4 and Level 2+ commercial projects."
It's unclear if keeping the Chinese parts of the company will threaten its standing with the Committee on Foreign Investment in the United States. The company was reportedly planning to sell its China subsidiary due to tight regulations and scrutiny in both countries. However, selling its Asia-Pacific (APAC) subsidiaries was never a CFIUS imposed requirement, TuSimple CEO Cheng Lu told TechCrunch.
"As management, in 2022, we felt the APAC operations were not being fully valued by the market and we understand the geopolitical sensitivity of having operations in both the U.S. and China in today's environment. So we started a divestment exploration process," Lu said, adding that APAC operations have continued to make significant commercial progress and the company believes its best interest to no longer explore a divestment.
Correction: The laid off workers represent 30% of global workforce. All of the layoffs are occurring in the United States.