San Francisco autonomous trucking company Embark Technology Inc. (Nasdaq: EMBK) is cutting 70% of its workforce and shutting down its Southern California and Houston offices, according to a letter CEO Alex Rodrigues sent to his staff on March 3.
The remaining 30% of workers will focus on winding down day-to-day operations, the letter states. They also will work with the board of directors to evaluate options such as selling assets, restructuring the company or shutting down completely.
Embark said in a regulatory filing that about 230 employees were laid off March 3. The layoffs are expected to occur in the first and second quarters and will result in estimated charges of approximately $7 million to $11 million in Embark's financial results.
Affected employees will receive their base salary through June 2 and their current company-sponsored medical, dental, and vision benefits through Aug. 31, Rodrigues said in the letter. The company is also providing career and immigration support.
Embark Trucks went public in 2021 via a merger with a special purpose acquisition company, and its stock plummeted the morning of March 6 by more than 30%. Rodrigues said over the next few weeks, the company "will work closely with the Embark Board of Directors to evaluate our options, including selling assets, restructuring the company or shutting down completely."
When Embark expanded into the Houston area in December 2021, a small team set up shop at the G-Tech Innovation Center in Katy. However, the company's plans for a future permanent location included approximately 100,000 square feet of space for trucks and office staff. Embark also planned to "hire aggressively in the greater Houston area in 2022," the company said at the time.
In the March 3 letter, Rodrigues said the past nine months have been difficult for the autonomous trucking industry.
"The capital markets have turned their backs on pre-revenue companies, just as slipping manufacturer timelines have delayed the prospect of scaled commercial deployment," he explained.
He concluded the letter by saying: "I believe that solving autonomous trucking will one day be a huge benefit to society, and while Embark may not be there to see the vision through in its current form, I hope you know that your work made a difference in pushing the industry forward. As a leader, founder, coworker, and friend, this is a day I never hoped to see, but I want to say thank you to all of you from the bottom of my heart for being on this journey with me."
