Nuro, a self-driving car delivery startup valued at more than $8.6 billion, is closing its Phoenix facility as it shifts its business strategy from the desert metropolis to the San Francisco Bay Area and Houston, according to TechCrunch.
According to an internal email viewed by TechCrunch, Nuro told employees that its Phoenix Depot will close on Oct. 1. It will continue to operate from its Tempe, Arizona, facility and company employees will not be affected. However, several self-driving car operators (AVOs) in Phoenix have already been laid off as a result.
“Given that Phoenix is no longer on our business roadmap for the foreseeable future, we will consolidate our resources and focus on our primary deployment areas in the Bay Area and Houston. We will immediately suspend our on-road operations in Phoenix and close the warehouse by Oct. 1,” the company said in an internal email.
A spokeswoman for Nuro confirmed the Phoenix layoffs and explained that Nuro has refocused its efforts in Arizona from over-the-road operations to remote operations. “This business strategy entails phasing out our Phoenix warehouse and focusing on remote operations in Tempe, Arizona,” the spokesman said in an email. He added that Nuro will still have operations in Arizona.
Nuro has been operating in Arizona for many years and launched the business in 2018 through a pilot program with Kroger, a grocery retailer that owns and operates Kroger, King Soopers, Fry’s and Pick ‘n Save stores. The pilot program in Scottsdale, Arizona, initially used a modified Toyota Prius sedan and transitioned to its first-generation robot, called the R1 vehicle. While Nuro’s partnership with Kroger expanded and continued in Houston, the pilot in Arizona ended.
Nuro launched R2 in February 2020, a second-generation robot designed and assembled in the U.S. in partnership with Michigan-based Roush Enterprises, equipped with LIDAR, radar and cameras to give the “driver” a 360-degree view of its surroundings.
The company is now focusing on a third-generation robot, known as Nuro, which will be unveiled in January 2022 and will be produced in partnership with BYD North America.
These vehicles are designed to deliver groceries and other goods, not humans. As Nuro transitioned from the Prius to its custom vehicles, it had to enhance its remote operating system, which allows humans to remotely monitor, communicate and even provide guidance to the robots when needed.
According to Nuro, three of the affected employees in Phoenix have chosen to leave, two are helping to close Nuro’s Phoenix warehouse and the rest will join the team in Tempe.
The company also laid off four employees in Houston and three at its Mountain View, California, facility.
“As part of our ongoing strategy to take a more focused approach to our business, we unfortunately made the difficult decision to let go of four of our Houston (non-AVO) employees and offered them all severance pay.” A spokesperson for Nuro told TechCrunch, “All affected employees were notified in person and individually at work.”
The company is not making layoffs elsewhere. As of January 2022, the company employed more than 1,200 people.
Nuro’s focus is on Houston and the Bay Area, where the company is headquartered, including working with several companies such as Walmart and CVS.
