Nuro Inc., an autonomous delivery vehicle developer that's been operating in Houston for the past few years, plans to slash more staff, move away from making its vehicles and focus on research and development in an effort to cut cost.
In an open letter posted on the Mountain View, California-based startup's blog, company founders Jiajun Zhu and Dave Ferguson blamed the changes on a difficult funding environment and the possibility of a recession. The cutbacks will ensure the company's cash stash will last for three and a half years, instead of running out in 18 months, they said.
"We've entered a new capital environment that will shape the next few years or more," Zhu and Ferguson said in the unsigned post. "In this new reality, we need to be more efficient with our balance sheet."
Nuro expects to make its new round of cuts this week, Zhu and Ferguson said in the post. They didn't say how many people the company will let go or where affected workers are based. In addition to the layoffs, the startup is pausing production of its third-generation vehicle, the R3, and scaling back its commercial operations, the founders said.
For now, the company intends to focus on developing its autonomous vehicle software, Zhu and Ferguson said, implying that much of that development will be done virtually.
Nuro's layoffs will be the third round of job cuts for the company in less than a year. In November, the startup laid off 269 workers from its Silicon Valley headquarters. In July, it closed its Phoenix office and cut less than 1% of its staff, including workers in Arizona, Houston and Mountain View.
The company last month offered certain workers the opportunity to get severance packages if they voluntarily resigned, the founders said in their post. They didn't say how many workers took the offer. The new layoffs come on top of those voluntary resignations.
"This change weighs on us most," Zhu and Ferguson said. "We are deeply inspired by the dedication and passion of our colleagues, and every step we take after this will be with gratitude for the hard work and contributions of the colleagues who will be leaving us."
Since its founding in 2016, Nuro has raised $2.1 billion, including a $600 million Tiger Global Management-led Series D round in late 2021 that gave the company a valuation of $8.6 billion.
Nuro has announced partnerships with several companies for autonomous deliveries in the Houston region since expanding its partnership with Kroger to the Bayou City in April 2019. Nuro announced it would pilot driverless grocery deliveries for Walmart Inc. (NYSE: WMT) in Houston in December 2019. In 2020, Nuro and CVS Pharmacy (NYSE: CVS) initiated a delivery program for prescriptions in the Bellaire area. Domino's Pizza Inc. (NYSE: DPZ) and Nuro kicked off a pilot program for driverless pizza deliveries in the Greater Heights area in April 2021. Around the same time, Nuro partnered with Memphis-based FedEx Corp. (NYSE: FDX) to test Nuro's autonomous delivery vehicles within FedEx's operations.
In September 2022, Nuro and San Francisco-based Uber Technologies Inc. (NYSE: UBER) inked a 10-year partnership for Uber Eats deliveries in the U.S., beginning in Houston and Mountain View.
Houston's growing population, climate, geography and driverless vehicle-friendly local regulations made the market attractive to Nuro, the company told the Houston Business Journal in 2019.
Late last year, Nuro started making delivery runs from a 7-Eleven Inc. store near its Mountain View headquarters.
