Zoox, the ambitious freelance startup that is said to be worth more than $ 3 billion, laid off almost all of its hired workers last week, including its backup drivers driving in the company’s autonomous vehicles. About 120 people are said to be out of work.
Zoox workers were informed in an email sent on Friday that their jobs were being completed immediately. They were told they were being blocked from an email from the company, Zoom & Slack, and that they would be required to turn in their company-issued laptops and badges. But Zoox also insisted that this should not be “considered a standard layoff.” The company said it will hire everyone “once the shelter is in place unless otherwise noted.”
“Zoox has every intention of resuming normal testing and business practices, and will require your efforts to return to normal,” the email said.
Several former workers interviewed by The Verge said they did not expect Zoox to deliver on its promise. A former Zoox worker who left the company last December said the company had a high turnover rate, noting that of the seven people who joined Zoox when this worker was initially hired, five were fired or fired three weeks later.
“It would be amazing if Zoox came back with everyone, but I doubt,” said the worker. “That sounds like everyone has fired me.”
Zoox appears to be the first AV operator to cut jobs during the viral outbreak. Most of the industry has temporarily halted operations in response to the pandemic.
In a statement, Zoox said its adherence to California’s order to shelter-in-place until May 3 brings “logistical and financial challenges to our operations, including a suspension of payment from Zoox contractors beyond April 7. if they can’t work remotely.”
“This decision was not taken lightly and is an unfortunate reflection of the difficult situation faced by many organizations in an uncertain economic climate,” the company said, adding that contractors who can work remotely were not fired.
Based in Foster City, California, Zoox was founded in 2014, with the ambitious mission of developing and building autonomous cars from scratch, rather than adapting traditional vehicles like many of its competitors. The company gained some notoriety for its plans to build a vehicle that can travel both forward and backward without the need to turn around, which it planned to introduce in late 2020. The following year, Zoox said it hoped to start testing your own robot-taxi service.
However, building your own vehicle is incredibly expensive. Zoox raised $ 500 million in venture capital to a post-money valuation of $ 3.2 billion in 2018. A few months later, the company’s board of directors unexpectedly ousted co-founder and CEO Tim Kentley-Klay, and replaced him with the former Intel chief strategy officer Aicha Evans. Its most recent cash infusion, in October 2019, was in the form of a $ 200 million convertible bill, an initial step in closing the Zoox C-series funding round. But that has not yet happened.
The company has hundreds of full-time software engineers, AI researchers, and coding experts on staff. Like the vast majority of AV companies, it relies on outside personnel agencies to fill a variety of other roles, such as security drivers, mechanics, vehicle cleaners, and others involved in the daily operation of its fleet. Zoox has multi-year contracts with two of these agencies, Aerotek and Experis. This keeps Zoox’s costs low, as well as putting some legal space between itself and many of its workers.
Zoox has 50 California registered test vehicles, as well as a smaller fleet based in Las Vegas. In early March, as cities began responding to the COVID-19 pandemic by issuing shelter-in-place orders, Zoox said it would stop testing its vehicles on public roads in San Francisco and Las Vegas.
Initially, some of the company’s contract workers had the impression that they were being fired, according to online chats seen by The Verge. A security driver said they contacted their Experis representative about the closure and received a link to unemployment insurance information in response.
But Zoox dismissed those claims as a result of a miscommunication and promised to continue paying workers until April 7, assuming they would return to work after that. The closure imposed by the pandemic has continued unabated, so the company chose to fire those workers.
The refuge rule in the state of California has been extended until May 3, which means that many AV companies are or will be in a similar position to Zoox. Some are exploring how to be designated as an “essential business” so they can continue testing during the shutdown. But backup drivers have told The Verge that they would be extremely reluctant to return to work without rigid guidelines for social distancing.
“Personally, I don’t think it will work,” said a backup driver who has worked at three autonomous car companies over the years, including Zoox. “But I also don’t want to go back to work if I’m going to be in a space with hella people and there is no indication that the virus is slowing down.”
Update April 6, 3:28 p.m. ET: This story was updated to include Zoox’s statement and to correct the number of vehicles in the company’s fleet.