Embark Trucks, the autonomous trucking company that made a splash when it went public in 2021, is now facing a major setback. The company has announced that it is cutting 70% of its workforce and shutting down two offices as it struggles to stay afloat.
CEO Alex Rodrigues broke the news to employees in an email, noting that the remaining 30% of workers would focus on winding down operations. The layoffs, which were announced on Friday morning, are expected to occur in the first and second quarters.
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Embark’s troubles stem from a lack of funding, which has forced the company to explore “alternative markets in which to commercialize its technology,” according to a regulatory filing posted on Friday. The filing also suggests that Embark may be looking to sell off its assets.
The news is a blow to the company, which was founded in 2016 by Rodrigues and CTO Brandon Moak. Embark quickly gained the attention of investors and had raised about $47 million by 2018. However, it was the SPAC boom that really delivered the capital, with the company agreeing to merge with special purpose acquisition company Northern Genesis Acquisition Corp. II in a deal valued at $5.2 billion.
Despite this early success, Embark is now struggling like other companies trying to develop and commercialize autonomous vehicle technology. The company’s market capitalization is about $90 million, and at the end of the third quarter, it had about $190 million in cash and cash equivalents.
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Embark’s troubles have been brewing for some time. Last month, banking advisory firm Evercore met with various AV companies to explore selling Embark’s assets, according to a source familiar with the matter. The layoffs and office closures appear to be a last-ditch effort to keep the company afloat.
The news is a stark reminder of the challenges facing companies in the autonomous vehicle space. Despite years of hype and investment, the industry has yet to deliver on its promises, and many companies are now struggling to stay afloat. For Embark, the future remains uncertain, but the company’s troubles are a warning to others in the industry.
