Embark Layoffs 2023: What to Know About the Latest EMBK Job Cuts

embark technologies (NASDAQ:EMBK) stock to be in focus on Friday. While shares are roughly flat on the day, Embark’s layoffs are making some headlines.

According to a recent regulatory filing, Embark’s Board of Directors has decided to reduce the current workforce by approximately 230 employees. According to the filing:

“The decision was based on cost reduction initiatives aimed at reducing operational costs […] The Company currently estimates that it will incur costs of approximately $7 million to $11 million related to the power reduction.”

If you’ve never heard of Embark, don’t worry. The autonomous truck technology company has a market cap of less than $100 million.

EMBK stock has been struggling quite a bit lately. At one point today, shares fell more than 11% on news of the layoffs at Embark. While shares were roughly flat this week, they’ve fallen more than 30% over the past month.

If we zoom out, the performance is even worse. Shares are down about 85% from the August 2022 high and 97% from the 2022 high. That’s quite an awful feat. With that in mind, however, the layoffs at Embark come as less of a surprise.

Consider more than layoffs

While many electric vehicle (EV) and automotive startup stocks have gone public in recent years, most have struggled. As if dethroning some of the largest, most efficient, fully capitalized legacy automakers wasn’t hard enough, doing so with robust competition has made it even harder. Now these companies are facing a bear market in stocks and a possible recession in the global economy.

Embark took a different approach and tried to optimize truck routes. A successful deployment would improve safety and reduce costs. However, the company has also struggled. Aside from the Embark layoffs, there are other developments at play. According to the same filing announcing the downsizing:

“[The board] approved a process to explore, review and evaluate a number of potential strategic alternatives available to the Company, including but not limited to exploring alternative uses of the Company’s assets to commercialize its technology, additional sources of funding, and a possible dissolution or liquidation of the company and liquidation of their assets.”

In other words, a potential sale could be on the table for Embark. The company’s banking consultancy has reportedly already met with several other autonomous vehicles (A V) company “to consider the sale of Embark’s assets.”

Embark Technologies, while showing promise, seems to be struggling hard at the moment. EMBK stock reflects this reality.

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At the time of publication, Bret Kenwell held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.