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In the wake of its acquisition by Ouster Inc., Velodyne Lidar Inc. has laid off 221 employees, including its CEO.
The San Jose company cut all the employees on Feb. 13, according to a letter sent the same day by Daniel Horwood, its general counsel, to state and local officials. Horwood, who himself was laid off, attributed the cuts to "a sale of the business."
"The company believes that this change will be permanent," he said in the letter.
In addition to Horwood and CEO Ted Tewksbury, Velodyne let go its chief technology officer, its chief people officer, its chief engineer and its chief quality engineer, Horwood said in the letter. It also laid off its senior vice president of worldwide sales, four vice presidents and numerous technicians and engineers.
All of the employees were based at Velodyne's headquarters at 5521 Hellyer Ave., Horwood said.
The cuts are deeper than San Francisco-based Ouster had previously said they would be following what the companies had previously dubbed a "merger of equals."
On Feb. 13 — the same day that Horwood notified state officials of the Velodyne cuts and the day the companies announced they'd completed their merger — Ouster CEO Angus Pacala told the Business Journal his company would lay off about 150 people that week and suggested that at least some of those cuts would come from Ouster's staff rather than just from Velodyne's.
In a regulatory document filed with the Securities and Exchange Commission last Thursday, Ouster said it planned to cut about 180 to 200 people to reduce its operating expenses after the merger.
In the interview with the Business Journal, Pacala said Ouster planned to eventually reduce the combined staff of the two companies to 350 people total, a move that could have implied cutting as many as 320 workers altogether, given a rough estimate of Ouster and Velodyne's workforces. But he declined to give either an exact number of people who would be cut or the combined number of employees of the two companies at the time of the acquisition.
An Ouster representative did not immediately respond to a request for comment about the layoffs.
Ouster expects to recognize $27 million to $30 million in charges related to the layoffs, mostly in the first quarter, it said in the SEC filing.
Velodyne's CEO, CFO land jobs at Ouster
Despite being officially laid off, Tewksbury had something of a soft landing. As part of its acquisition of Velodyne, Ouster tapped him to be its executive chairman. In that role, he's replacing Susan Heystee, who had chaired Ouster's board for more than a year. Heystee remains a director.
Ouster also named Velodyne Chief Financial Officer Mark Weinswig to be its CFO, replacing Anna Brunelle. Brunelle had been Ouster's finance chief for a little more than two years.
Both Ouster and Velodyne make lidar sensors, which are laser-based proximity detection devices. Lidar sensors are at the center of most self-driving car systems. Riding the hype around autonomous vehicles, Ouster and Velodyne were among eight lidar sensor makers with local ties that went public in an an 18-month period stretching from the fall of 2020 to last February.
Ouster's layoffs, Velodyne acquisition and leadership changes come as the two companies — and the lidar industry as a whole — have struggled.
With the autonomous vehicle industry ramping up much slower than anticipated, all of the companies have seen their share prices plunge. All have posted continuous losses. And what was left of one, Quanergy Systems Inc., was sold off after it went bankrupt.
For its part, Ouster lost $96.6 million in the first nine months of last year on $30.1 million in sales. Velodyne lost $135 million over that same period on sales of $27.3 million.
Ouster's stock (NYSE: OUST) fell two cents a share, or about 2%, Thursday, closing at $1.18 a piece.