Autonomous trucking software developer TuSimple is cutting 300 more U.S. jobs — 30% of its global workforce. But it will keep its China operations, reversing a plan to sell or spin them off.
The moves announced Thursday mean the company now will have just 750 employees. That’s about half its size before a restructuring in December that cut 350 jobs.
TuSimple shares traded 17% higher Thursday morning at $1.50.
The company has not filed required financial reports for the fourth quarter of 2022 or its annual 10-K. That puts it in violation of Nasdaq rules. Its TSP ticker symbol could be delisted as soon as the end of May.
The company said it will not file its 10-Q report for the January-to-March period on time because it is working with a new auditor. Its previous auditor, KPMG, quit last September over TuSimple’s reputational risks.
An appeal of the delisting is scheduled June 22. The Nasdaq could extend a 15-day stay that began Friday. That would allow TuSimple to trade between the end of May and the hearing date.
‘Reduced capital availability’ among reasons for new cuts
“As we relaunch TuSimple, we have taken a variety of factors into consideration including further deterioration of global economic growth, significantly reduced capital availability in the self-driving industry and redundant hardware availability,” Cheng Lu, president and CEO of TuSimple, said in a news release.
“Given these factors, we believe this restructuring, while difficult, aligns our capital spend with the pace of overall industry readiness and improves our long term competitive position.”
TuSimple CFO Eric Tapia told FreightWaves in March that the company ended 2022 with nearly $1 billion on its balance sheet. With no financial filings since the second quarter of 2022, transparency on TuSimple’s finances is lacking.
The startup founded in 2015 went public via an initial public offering in April 2021. The share price opened at $40. Other than a brief run-up, the stock has traded below its IPO price. It cratered last fall amid boardroom turmoil, the ouster of co-founder Xiaodi Hou as CEO, the rehiring of Lu as CEO and the ouster of four independent directors who had fired Hou.
Celebrating a milestone
In March, Lu held and all-staff meeting in Tucson, Arizona. It is the location of the San Diego-based company’s U.S. engineering and development operations. He celebrated the milestone of 10 million testing, research and freight delivery miles driven with human supervision.
That mileage accumulation will rise more slowly following the shutdown of Texas freight-hauling operations. TuSimple is selling about 50 of its 70 Class 8 tractors. Lu said the company is focused on launching a fourth-quarter 2024 commercial route between Tucson and Phoenix with no driver in the cab. It has not announced a customer for that route.
The end of a two-year manufacturing partnership with Traton Group’s Navistar leaves TuSimple to equip an existing truck with its software and redundant steering, braking and other systems needed when no human is present.
TuSimple reverses course on China
The decision to retain its China operations was surprising given TuSimple’s attempts to show the U.S. and Chinese operations were separate under ongoing scrutiny by the Committee of Foreign Investment in the U.S. TuSimple agreed in 2022 to operate with limited U.S. oversight to satisfy CFIUS.
“The company believes it is in the best interest of shareholders to continue owning and operating its Asia Pacific subsidiaries and is no longer exploring a transaction,” the release said.
Over the past year, TuSimple’s Asia Pacific subsidiaries worked with several OEMs on Level 4 and driver-assisted Level 2+ commercial projects. That is the approach taken by rival Plus, which is also active in China.
In April, TuSimple announced that its proprietary, high-performance central compute unit — TuSimple Domain Controller (TDC) —should be ready for commercial production at the end of 2023.
At the Shanghai Auto Show, TuSimple introduced an integrated software plus hardware autonomy perception solution for OEM customers called TS-Box. The company intends to continue to develop Level 4 commercial autonomous freight opportunities in multiple Asia Pacific markets.
TuSimple US job cuts expected to save $120 million
The new organizational structure for U.S. operations prioritizes validation and testing of the company’s Level 4 autonomous technology. It also improves organizational accountability and reporting lines.
The restructuring will cost $12 million to $13 million in one-time charges, mostly severance and Worker Adjustment and Retraining Notification Act-related expenses. TuSimple expects to save $64 million to $68 million through the job cuts. Including the December 2022 restructuring, the company expects to save more than $120 million.
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Click for more FreightWaves articles by Alan Adler.
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