Shares of Embark Technology Inc lost nearly a third of their value on Monday after the self-driving truck company announced it would lay off 70 per cent of its employees and start evaluating options, including winding down the business.
The announcement on Friday came after a tough year for companies like Embark, as developing fully autonomous vehicles (AVs) has proven harder and more expensive than expected.
Investors and industry watchers have also been concerned about billions of dollars that have been poured into the self-driving technology sector in a short span of time to commercialize it.
“Today, having exhausted all alternatives, we are taking the incredibly difficult step of laying off ~70 per cent of the company, and shutting down our SoCal (Southern California) and Houston offices,” Chief Executive Alex Rodrigues told employees in an email on Friday.
“Over the next handful of weeks, we will work closely with the Embark Board of Directors to evaluate our options, including selling assets, restructuring the company or shutting down completely.”
Embark went public in 2021 through a special purpose acquisition company (SPAC) deal and is backed by Mubadala Capital, Sequoia Capital and Tiger Global Management.
The company expects to incur charges of $7 million to $11 million related to the workforce reduction, which spans about 230 employees.
Shares of Embark closed down 32.8 per cent lower at $2.56 on Monday, giving the firm a market capitalization of $60 million, compared with the over $5 billion in market value when it went public.
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