TuSimple Holdings Inc., a global self-driving freight forwarder. The company is set to cut at least 700 jobs next week, just before Christmas.
The San Diego-based technology company, which has operations in Arizona, Texas and China, has about 1,430 full-time employees. TuSimple executives are looking to cut that headcount by roughly half as the company scales back its efforts to build and test autonomous truck systems, The Wall Street Journal reported Friday.
The layoffs come at a tumultuous time for the company, which underwent a leadership shakeup in October after reports revealed that the FBI, the Securities and Exchange Commission (SEC) and the Committee on Foreign Investment in the United States (CFIUS) were each investigating TuSimple. connections. China’s Hydron Inc. to the startup.
The job cuts are expected to be announced on 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, most of TuSimple’s operations in Tucson, Ariz., where it does most of its test driving, will be eliminated, and the team working on the self-driving software’s algorithms will be shuttered significantly. “, the report says.
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TuSimple will focus on improving software products to suit self-driving trucks and trucking carriers to offer freight at a lower cost than human trucks, people familiar with the company’s plans said.
FOX Business reached out to TuSimple for comment, but did not hear back.
Employees were preparing for layoffs. TuSimple CEO Cheng Lu, who previously ran the company and returned in November, emailed employees earlier this month to say management was reviewing “our people costs, the biggest part of our cash flow,” the magazine reported.
Lu told the Journal that he intends to “right the ship, and that includes making the company capital efficient.”
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“TuSimple is cutting costs and scaling back its ambitions as it emerges from a series of crises this year, including the crash of one of its self-driving trucks in April, the loss of a key business partnership, two CEO changes, and falling stock prices. and concurrent government investigations,” the report said.
The company is losing money. For the first half of 2022, TuSimple reported just $4.9 million in revenue and a $220.5 million loss, according to the report. His partnerships with other companies, including Navistar International Corp. and McLane Company Inc., have also collapsed amid controversy.
“McLane is aware of TuSimple’s recent management, operational and route changes and has been communicating with their team. We value the business relationship with TuSimple and will determine the next course of action in due course,” said the head of McLane’s. Administrative Officer Larry Parsons told the Journal.
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In October, TuSimple fired its chief executive and co-founder Xiaodi Hou after an internal board investigation found that Hou had passed confidential information to Hydron, a Chinese shipping startup that operates primarily in China and is funded by Chinese investors. After his ouster, Howe recruited TuSimple co-founder and Hydron founder Mo Chen to hit back at the board by firing them. Together, they brought Lou back to lead the company, the Journal reported.
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The company is currently working on compliance with US regulatory authorities.