Autonomous trucking company TuSimple to cease US operations amid new round of lay-offs, focus on Asia-Pacific business

Autonomous trucking company TuSimple Holdings is set to wind down its operations in the United States amid plans to cut 75 per cent of its remaining workforce in the country, according to the Nasdaq-listed firm's latest filing.

TuSimple's board of directors approved a new round lay-offs that will affect around 150 employees, or 19 per cent of its global workforce, as part of its restructuring initiative, the company said in a filing with the US Securities and Exchange Commission (SEC) on Monday.

The remaining US employees will focus on "winding down the company's US operations, including through sales of US assets, and assisting with the company's strategic shift to the Asia-Pacific region".

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TuSimple's exit from the US could mark the end of major autonomous truck development programmes in the country, following Alphabet unit Waymo's decision in July to slow down work in that field under its Via subsidiary. In May, Embark Technology - an early proponent of self-driving truck software development in the US - delisted from the Nasdaq and went private via a merger after running out of capital to pursue commercial production.

Headquartered in San Diego, California, autonomous trucking company TuSimple plans to exit the US and shift its focus to China and the Asia-Pacific. Photo: TuSimple alt=Headquartered in San Diego, California, autonomous trucking company TuSimple plans to exit the US and shift its focus to China and the Asia-Pacific. Photo: TuSimple>

TuSimple's latest job cuts will leave it with around 700 full-time employees worldwide, according to the company's filing. That number would be down from around 1,400 last December.

The company, once considered a star in the global autonomous driving sector and a leader in US self-driving truck development, has focused on level 4 autonomy - in which the vehicle can handle most driving situations independently, but a human can still request control of the cockpit.

In July 2020, TuSimple struck a partnership with American truck maker Navistar International to co-develop advanced self-driving semi-trailer trucks targeted for production by 2024. Multinational package delivery company UPS took a minority stake in TuSimple in 2019. It also received funding from semiconductor design firm Nvidia in 2017.

In 2018, TuSimple was the first company to deploy autonomous trucks on pilot tests between the cities of Tucson and Phoenix in Arizona and Las Vegas, Nevada.

TuSimple has touted its autonomous driving system as being capable of true driverless trucking operations along a commercial route. Photo: TuSimple alt=TuSimple has touted its autonomous driving system as being capable of true driverless trucking operations along a commercial route. Photo: TuSimple>

The company, however, has grappled with a US government investigation, corporate disputes and lay-offs since 2022.

In May this year, TuSimple reorganised its US operations with a 30 per cent reduction of its global workforce amid a "further deterioration of global economic growth, significantly reduced capital availability in the self-driving industry and redundant hardware availability".

The company last December embarked on a 25 per cent staff reduction, affecting around 350 employees out of its total workforce, as part of a restructuring that mostly covered its US business.

It has also struggled to turn a profit since going public in the US in 2021. During the September quarter, TuSimple recorded a net loss of US$61.4 million, compared to US$113.2 million in the same period last year.

TuSimple's US-traded stock has lost 97 per cent since its initial public offering.

TuSimple has struggled to turn a profit since it went public on the Nasdaq stock market in 2021. Photo: TuSimple alt=TuSimple has struggled to turn a profit since it went public on the Nasdaq stock market in 2021. Photo: TuSimple>

Lu Cheng, chief executive at TuSimple, said in April that the company had been "isolating" its China team from the US team, and wanted to resolve New York delisting risks after its previous auditor KPMG ended its partnership amid management turmoil at the autonomous trucking firm.

"Because of the Committee on Foreign Investment in the United States (CFIUS) investigation last year, we had more separation and this will continue in future," Lu told the South China Morning Post in April.

CFIUS, an inter-agency panel that reviews the national security implications of foreign investments in the US, kicked off an investigation of TuSimple with the FBI and SEC in 2022.

The inquiry revolved around whether TuSimple co-founder and then-chief executive Hou Xiaodi made illegal funding or technology transfers to Hydron, a Chinese autonomous truck start-up established by another TuSimple co-founder Chen Mo in 2021. Hou was fired by the company's board in October last year after an internal investigation.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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