Autonomous-truck company TuSimple Holdings Inc. announced that it will be winding down its U.S. operations and reducing its workforce by 75%. The decision comes after a challenging year for the San Diego-based company. TuSimple plans to sell its U.S. assets as it refocuses its efforts on Asia.
Workforce Reduction and Asset Sale
TuSimple will be laying off approximately 150 employees, which accounts for 75% of its U.S. workforce. This move is in line with the company’s strategy to shift its focus to the Asian market. In order to facilitate this restructuring, TuSimple is expecting a one-time charge of $7 million to $8 million, mainly attributed to severance packages, benefits, and related employee expenses.
Leadership Change and Previous Challenges
Last year, Mo Chen, co-founder of TuSimple, assumed control of the company after the previous CEO, Xiaodi Hou, was removed from his position. The board had decided to terminate Hou following investigations into potential fraud and the improper financing of the company. These investigations also involved allegations that advanced technology was being funneled to another startup owned by Chen in China.
TuSimple has faced several challenges in recent times. Significant layoffs were announced in November 2022, and in May of this year, the company received a delisting notice from the Nasdaq. Seeking a potential sale of its U.S. business, TuSimple has been actively exploring options since June.
TuSimple went public in April 2021 with an initial valuation of $8.5 billion, and its IPO was priced at $40 per share. However, the company’s shares have experienced a significant decline in value since then. As of the latest close, TuSimple’s shares were trading at 99 cents, resulting in a market cap of $216 million. Year to date, the stock has fallen by 39%.
Despite these challenges, TuSimple remains committed to its vision and aims to capitalize on opportunities in the Asian market moving forward.