Embark Trucks, the autonomous trucking company that went public in 2021 via a merger with a special purpose acquisition company, is cutting 70% of its workforce and shutting down two offices. And the pain may not be over as CEO Alex Rodrigues noted in an email to employees that the remaining 30% of workers will focus on winding down operations.
The company said in a regulatory filing that about 230 employees were laid off Friday. A source familiar with the plan said the cuts were announced Friday morning. The layoffs are expected to occur in the first and second quarters.
“Unfortunately, after thoroughly evaluating all alternatives, we have been unable to identify a path forward for the business in its current form, Rodrigues wrote, later adding “Today, having exhausted all alternatives, we are taking the incredibly difficult step of laying off ~70% of the company, and shutting down our SoCal and Houston offices.”
The layoffs come more than a month after banking advisory firm Evercore met with various AV companies to explore selling Embark’s assets, according to one source.
A sale of assets appears to be the next order of business, according to a regulatory filing posted Friday and Rodrigues’ email.
Embark’s board approved Wednesday “a process to explore, review and evaluate a range of potential strategic alternatives available to the company,” including alternative uses of its assets to commercialize its technology, additional sources of financing, as well as potential dissolution or liquidation of its assets.
“The board’s decision comes following an extended evaluation by the company of alternative markets in which to commercialize its technology as well as an exploration, performed with the assistance of a financial advisor, of a potential sale of the company,” the filling said.
Embark Trucks was founded in 2016 by CEO Alex Rodrigues and CTO Brandon Moak and quickly got the attention of investors. Rodrigues and Moak met while working on self-driving technology at the University of Waterloo, where both completed Mechatronics engineering degrees.
By 2018, the startup had raised about $47 million. But it was the SPAC boom that really delivered the capital — at least for a short time. In 2021, agreed to merge with special purpose acquisition company Northern Genesis Acquisition Corp. II in a deal valued at $5.2 billion.
Today, Embark Trucks is running short on capital like other companies trying to develop and commercialize autonomous vehicle technology. The company’s market capitalization is about $90 million; at the end of the third quarter, the most recent quarterly report the company has filed, it had about $190 million in cash and cash equivalents.