Saturday, February 4, 2023
HomeMarketSelf-Driving Startup TuSimple Slashes Staff in Bid to Right the Ship.

Self-Driving Startup TuSimple Slashes Staff in Bid to Right the Ship.

Shares of self driving trucking company TuSimple have hit a pothole.

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Courtesy of TuSimple

Autonomous driving technology company
TuSimple
is cutting staff in a bid to save money, preserve cash, and refocus the company headed into more difficult economic times.

The company (ticker: TSP) announced late Wednesday it is cutting about 25% of its employees, or about 350 people, to save $55 to $65 million annually. The company will have about 1,100 people when the restructuring is complete.

Most of those people will be in R&D functions, according to the company.
TuSimple
doesn’t have significant sales yet. It is working on Level 4 self driving solutions for the trucking industry. Level 4 refers to vehicles that can drive themselves, without any human intervention required, in most situations.

Level 5 refers to the car doing the driving in all situations. Most self-driving systems on roads today are so-called Level 2 systems that require drivers to pay attention 100% of the time.

“I returned to TuSimple as CEO to help address a number of challenges and set the Company up for long-term success,” said Chief Executive Cheng Lu in a news release. “This required evaluating our entire workforce and making tough decisions. It’s no secret that the current economic environment is difficult. We must be prudent with our capital and operate as efficiently as possible.”

TuSimple has had a difficult few months. Lu returned after the company removed its CEO, Xiaodi Hou, at the end of October. Shares plunged 45.6% the day of the announcement. Shares are down roughly 96% year to date wiping out more than $7 billion in market capitalization.

Since the CEO exit, Lu has returned, and the company has named new directors and a new chief financial officer.

TuSimple stock is up 1.4% in premarket trading Thursday.
S&P 500
and
Dow Jones Industrial Average
futures are both down about 0.2%. Investors are used to volatility with TuSimple stock these days. Shares dropped 6% in Wednesday trading.

Twelve analysts cover the stock. None rate the shares Buy. The average analyst price target is less than $5 a share, down from about $56 at the start of the year.

TuSimple ended the third quarter with about $1 billion, according to management. The company has been using about $80 million to $110 million in cash per quarter. Wall Street expects the company to use about $440 million in 2023.

Write to Al Root at allen.root@dowjones.com

Credit: marketwatch.com

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