TuSimple, global autonomous driving technology company, announced a restructuring plan for its U.S. operations that is intended to enable the company to continue maturing its technology while preserving the company’s balance sheet. The company also announced it is no longer seeking strategic alternatives for its Asia Pacific subsidiaries.
In light of current market conditions, TuSimple announced it is reorganizing its U.S. operations and better aligning staffing levels with the company’s goals. This includes an approximately 30% reduction to TuSimple’s global workforce. The reduction in workforce will only impact TuSimple locations within the U.S.
Rooted in the tenets of the “V-model,” an industry standard for developing complex systems, TuSimple says the new organizational structure for U.S. operations is designed to prioritize validation and testing of the company’s Level 4 autonomous technology, and to improve organizational accountability and reporting lines. The restructuring is expected to lead to approximately $12 million to $13 million in one-time charges, consisting primarily of severance and WARN Act-related expenses, and result in an expected annual cash compensation expense savings of approximately $64 million to $68 million. Including the restructuring in December 2022, total annual cash compensation savings are expected to be in excess of $120 million, according to the company.
“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,” said Cheng Lu, president and CEO of TuSimple. “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. These decisions are not made lightly as they impact many of our colleagues. Our company would not be where it is today without their contributions. For that, they have our utmost gratitude.”
TuSimple Asia Pacific Subsidiaries‘ Update
The company says in the best interest of shareholders to continue owning and operating its Asia Pacific subsidiaries, it is no longer exploring a transaction. In the past year, TuSimple’s Asia Pacific subsidiaries have continued to make progress working with several OEMs on Level 4 and Level 2+ commercial projects. In April 2023, TuSimple announced that its proprietary, high-performance central compute unit – TuSimple Domain Controller (TDC) – is expected to be ready for commercial production at the end of 2023.
For more information, visit www.tusimple.com.
