The autonomous delivery vehicle manufacturer Nuro is departing 340 employees today as part of an ongoing restructuring that aims to protect the firm’s balance sheet in an increasingly difficult environment for startups.
In a blog post shared earlier this week by the two co-founders of the business, Dave Ferguson and Jiajun Zhu, they acknowledged that the firm has thrived thus far in what they consider a “favorable fundraising environment”.
However, the actions taken by the United States Federal Reserve and other major central banks across the world, including hiking interest rates aggressively to stop inflation from spiraling out of control, have changed the game for early-stage companies like Nuro and have prompted investors to adopt more conservative stands when it comes to pouring hundreds of millions into promising businesses.
“We’ve entered a new capital environment that will shape the next few years or more. In this new reality, we need to be more efficient with our balance sheet”, Ferguson and Zhu asserted.
Nuro to Stop Developing Third-Generation AV to Increase Cash Runway
Along with these announced job cuts, Nuro will also be leaving aside its efforts to design and manufacture the third generation of its autonomous delivery vehicles and will, instead, focus on further strengthening its functioning core business, which includes the use of its P2 and R2 vehicles to create maps and make deliveries in the states of California and Texas.
By trimming its capital investments and operating expenditures, Nuro’s leadership claims that it can extend the firm’s runway to stay afloat for the next 3 and a half years at least, which may allow them to navigate today’s complex macroeconomic environment.
The exact number of departed employees was not shared by Nuro’s leadership on the blog post but the tech-focused magazine TechCrunch received notice of the extent of the layoffs today. The company will offer its ex-employees 12 weeks of salary as severance pay along with two extra weeks for people who have been with the firm for over 2 years.
In addition, some employees will be entitled to receive almost two-thirds of their target bonuses and will retain health care benefits until 30 September this year.
Adding these latest cuts, Nuro has let go of 640 employees in total over the past 6 months as part of its effort to take shelter at a point when the United States economy is expected to enter a recessionary cycle.
The last time Nuro raised money was in November 2021 when the company harnessed $600 million from a group of investors that included high-flying venture capital firms and tech giants such as Tiger Global and SoftBank. The firm was valued at $8.6 billion during this Series D funding round. In total, Nuro has raised $2.1 billion from investors since its founding.
Tech Firms “Right-Size” Their Organizations as a Global Recession Looms
According to Layoffs.fyi, the number of job cuts in the tech sector ascends to 193,860 as of today with Nuro being the latest firm to make the list. Earlier this week, the professional networking giant LinkedIn departed more than 700 people around the same time that Shopify cut a fifth of its workforce.
Other startups and even more mature businesses in the tech world are taking similar actions as Nuro to protect their balance sheets amid the expectation that obtaining funding from investors will either demand sharp valuation cuts or hybrid deals that may push their firms into debt.
Meanwhile, those that aggressively hired during the pandemic to cope with an unexpected jump in the demand for their products, services, and solutions are now right-sizing their firms in preparation for an upcoming global economic slowdown.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.