Autonomous vehicles startup Nuro winds down operations in Phoenix

Nuro, the autonomous vehicle delivery startup that is valued at more than $8.6 billion, is closing its Phoenix facility as it shifts its commercial strategy away from the desert metropolis and toward the San Francisco Bay Area and Houston.

Nuro told employees that the Phoenix Depot location would be closed by October 1, according to an internal email viewed by TechCrunch. It will continue to operate out of its Tempe, Arizona facility and corporate employees will not be affected. However, several autonomous vehicle operators (AVO) in Phoenix have been laid off as a result.

“Given that Phoenix is no longer on our commercial roadmap for the foreseeable future, we will consolidate our resources to focus on our primary deployment areas in the Bay Area and Houston. We will suspend on-road operations in Phoenix effective immediately and close the depot by October 1,” the internal email said.

A Nuro spokesperson confirmed the Phoenix layoffs, explaining Nuro has adjusted its focus in Arizona from on-road operations to teleoperations. The business strategy “entails winding down our Phoenix Depot and concentrating on tele-operations in Tempe, Arizona,” the spokesperson said in an email, adding that Nuro will still have a presence in Arizona.

Nuro has been operating in Arizona for years, a presence that kicked off in 2018 through a pilot project with Kroger Co., the grocery retailer that owns and operates Kroger, King Soopers, Fry’s and Pick ‘n Save stores. The pilot in Scottsdale, Arizona initially used modified Toyota Prius sedans and transitioned to its first-generation bot, called the R1 vehicle. While Nuro’s partnership with Kroger expanded and continued in Houston, the pilot in Arizona ended.

Nuro introduced the R2 in February 2020, a second-gen bot designed and assembled in the U.S. in partnership with Michigan-based Roush Enterprises that is equipped with lidar, radar and cameras to give the “driver” a 360-degree view of its surroundings.

It’s now on its third-gen robot, simply called Nuro. The “Nuro” (pictured below), which was unveiled in January 2022, will be manufactured in partnership with BYD North America.

Image Credits: Nuro

These vehicles are designed to ferry groceries and other goods, not humans. As Nuro has transitioned away from the Prius to its custom-built vehicle, it has had to beef up its teleoperations system, which allows humans to remotely monitor, communicate and even offer guidance to the bots if needed.

Of the employees impacted in Phoenix, three opted for severance, two are helping close down Nuro’s Phoenix Depot and the rest will be joining the team in Tempe, according to Nuro.

The company has also laid off four employees in Houston and three at its Mountain View, California facility.

“As part of our ongoing strategy to adopt a more focused approach with our operations, unfortunately, we made the difficult decision to let four of our Houston (non-AVO) employees go, and offered them all severance packages. All of the impacted employees were informed in person and individually at work,” a Nuro company spokesperson told TechCrunch.

No other reductions have taken place elsewhere in the company. As of January 2022, the company employed more than 1,200 people.

Nuro’s focus on Houston and the Bay Area, where the company is headquartered, includes partnerships with several corporations including Walmart and CVS.