Nuro, the autonomous vehicle delivery startup backed by Softbank, Google and Tiger Global Management, is laying off about 300 people, or 20% of its workforce in an effort to preserve cash amid a stormy economic outlook, according to an email sent to employees this morning.
Several Nuro employees also posted on Twitter and LinkedIn this morning that they had been affected by the layoffs.
In the email viewed by iTechGo.com, co-founders Jiajun Zhu and Dave Ferguson informed employees they would receive an update later this morning letting them know if they are impacted by this layoff and with information on next steps.
The co-founders said they take responsibility for the layoffs, which were the result of over-hiring in 2021 smacking into economic headwinds in 2022.
Each and every one of you have made important contributions to this company, and saying goodbye to talented Nurons is not a decision we have taken lightly. For those of you leaving Nuro, we are very sorry for this outcome — this is not the experience we wanted to create for you. We made this call and take full responsibility for today’s circumstances.
Ferguson and Zhu wrote that in 2021, it was the “strongest fundraising environments in history.” “We saw an abundant supply of capital for deep tech companies and almost all companies were aggressively hiring and expanding,” they wrote, adding that “In that environment, we determined it made sense to invest heavily across the board and grow our team rapidly.”
Exactly one year ago, Nuro raised $600 million in a fundraising round led by new investor Tiger Global Management. The Series D round, which pushed its valuation to about $8.6 billion, attracted high-profile investors including Baillie Gifford, Fidelity Management & Research Company, Google, China-based venture firm Gaorong Capital, grocery retailer Kroger, SoftBank Vision Fund 1, funds and accounts advised by T. Rowe Price Associates, Inc. and Woven Capital, a venture arm of Toyota subsidiary Woven Planet.
That led the company to double the size of its team in less than two years and significantly increased operating expenses based on an assumption that the funding environment would remain robust. “This was a mistake,” they wrote.
Macroeconomic conditions in 2022, which has included inflation and an impending U.S. recession, prompted the founders to slash costs, including cutting its workforce in an effort to extend its capital runway into 2025.
Nuro still has more than $1 billion on its balance sheet, the pair wrote.
Laid off workers are being offered 12 weeks of severance pay and up to 14 weeks for those who have been with the company more than two years. The company will also pay out bonuses to those who are eligible, and are waiving the one year vesting cliff on the equity front. Nuro will subsidize 100% of COBRA healthcare premiums (including families) through March 31, 2023, will provide career transition support and visa holders will also receive some notice period to ease this transition and if applicable, travel assistance, the email said.
While the company has made progress and is operating in Houston, Palo Alto, and Mountain View, California, it’s also pulled back operations in at least one area. The company closed its Phoenix facility this summer as it shifted its commercial strategy away from the desert metropolis and toward the San Francisco Bay Area and Houston.
Story is developing.