This story is part of our look back at 2022 and the 10 biggest stories in Pittsburgh's business world from the past year.
For several months in 2022, Pittsburgh seemed immune to the economic downturn seen across the country that started around the year’s onset. This downturn — primarily impacting tech companies of all sizes — wasn’t rearing its head locally like it was at companies elsewhere, especially along the coasts, as these firms began implementing hiring freezes and issuing layoff notices to cut costs amid a tightening in the capital markets.
But by mid-summer, signs that the downturn had come to Pittsburgh began to show, and more than 1,000 local employees would be out of a job by year’s end, with two big firms shutting down completely.
In July, Strip District-based autonomous vehicle startup Argo AI LLC laid off 150 workers across its footprint, about 5% of its global workforce, and it shuttered its Washington, D.C.-based operations. Many roles affected appeared to be recruiting positions within the company, among other positions, according to an analysis of public posts on LinkedIn from former staffers.
“It seems Argo just hired too many people too fast,” one former recruiting coordinator said.
A few weeks later, Coraopolis-based Seegrid Corp., which makes autonomous mobile robots for warehouses, disclosed it also made staff cuts — about 90 local workers, or a reduction of about 25% based on its estimated employee count of 350 in July 2022. Jim Rock, the company’s CEO, would go on to step down from his post in September.
By October, the downturn’s local impact only accelerated.
Locomation Inc., another AV startup, confirmed on Oct. 12 it furloughed an undisclosed number of positions “not related to the go-to-market” strategy of the company. It now employs about 100 workers locally.
Two weeks later it became apparent that Argo’s prior staff cuts in July weren’t enough: The startup announced it would be shutting down completely, its assets absorbed by its backers — Ford Motor Co. and Volkswagen AG, which invested more than $1 billion into the company and decided to pull the plug once it became apparent the timeline to self driving was longer than initially expected. Its closure, unprecedented for a young company of its size in Pittsburgh, led to the termination of nearly 700 jobs throughout the region.
And days after Argo’s shuttering, South Side-based vertical farming and robotics startup Fifth Season also closed its doors and laid off its estimated 100-person workforce. It’s been speculated by many familiar with the company’s internal workings that it ran out of cash, though efforts are apparently underway to try and salvage at least some of the company. Fifth Season CEO and Co-Founder Austin Webb has denied multiple requests for comment.
Among the biggest concerns in the wake of Argo and Fifth Season’s closing remains true today: What will become of their former workforces?
“A lot of those jobs could go away, research activity could move elsewhere, the jobs and the workers could move elsewhere, but we’ll have to keep a close eye on that,” Christopher Briem, a regional economist at the University of Pittsburgh’s University Center for Social and Urban Research, said in November in relation to Argo’s closure. “I think it’s a fairly big deal in the short term here for the region. It’s a big deal for these workers, obviously. It’s a big deal for real estate development. I think a lot of things were not predicated on this going away so quickly.”
Don Smith, president of the Regional Industrial Development Corporation of Southwestern Pennsylvania, described Argo’s shuttering as “a wake-up call” for the region. RIDC served as the landlord of Argo’s 2,800-square-foot test track facility in Westmoreland County.
“Whether [this phenomenon is] six months or a year or 18 months, I don’t know, but I do know tech will be back,” Smith said. “The lesson is we need to do more to strengthen and grow and embed our tech companies in our region to better prepare them to compete.”
BONUS STORY: Region gets Build Back Better grant
In September, the greater Pittsburgh region learned that its pitch in the "Build Back Better Regional Challenge" placed among 20 other bids to receive significant federal funding from the $1 billion national competition.
The winning proposals from the challenge aim to grow new regional clusters or scale existing ones across the country.
For the Pittsburgh region's $62.7 million grant, funding will go toward five major projects that touch on robotics-related developments as well as provide funds for 20 other regional entities that work in this industry or similar ones. It's being overseen by the Southwestern Pennsylvania New Economy Collaborative, which encompasses 11 counties in southwestern Pennsylvania and is co-chaired by Stefani Pashman, CEO of the Allegheny Conference on Community Development, and Farnam Jahanian, president of Carnegie Mellon University.
In late November, The Brookings Institution singled out the region's pitch as being among the most equitable proposals in the country due to its objectives and scope, among other factors.
