Autonomous trucking company Embark Trucks, which went public in 2021 through a merger with a special purpose acquisition company, has decided to cut 70% of its workforce and close two offices. Even though the remaining 30% of employees will continue working to wind down operations, CEO Alex Rodrigues has hinted that more layoffs may occur.
The layoff announcement was made on Friday morning, with approximately 230 employees affected, according to a regulatory filing. The job cuts are anticipated to take place in the first and second quarters of the year.
In a message to employees, Rodrigues expressed disappointment that the company had been unable to identify a feasible way to move forward in its current form. He stated that the company had examined all available options before arriving at the difficult decision to lay off around 70% of the workforce and shut down its Southern California and Houston offices.
One source has reported that the layoffs occurred more than a month after banking advisory firm Evercore met with various autonomous vehicle (AV) companies to consider selling Embark Trucks’ assets.
According to a regulatory filing and Rodrigues’ email, the next step appears to be the sale of the company’s assets. The board approved a process on Wednesday to assess a range of potential strategic alternatives available to the company, including alternative applications of its technology to commercialize it, additional sources of financing, as well as the possible dissolution or liquidation of its assets.
The regulatory filing explained that the board’s decision was made following an extended evaluation of alternative markets to commercialize its technology and a review, with the assistance of a financial advisor, of the potential sale of the company.
Embark Trucks was established in 2016 by CEO Alex Rodrigues and CTO Brandon Moak, who met while working on self-driving technology at the University of Waterloo, where they both earned degrees in Mechatronics engineering. The startup quickly caught the attention of investors and had raised approximately $47 million by 2018. However, it was the SPAC frenzy that ultimately provided the funding – at least for a brief period. In 2021, Embark Trucks agreed to merge with special purpose acquisition company Northern Genesis Acquisition Corp. II in a transaction valued at $5.2 billion.
Like other companies that are attempting to develop and commercialize autonomous vehicle technology, Embark Trucks is now running low on capital. The company’s market capitalization is approximately $90 million, and its most recent quarterly report, which was filed at the end of the third quarter, indicated that it had around $190 million in cash and cash equivalents.