Listen to this article

There are reports of major layoffs at Pudu Robotics, a Chinese developer of commercial service robots. Reports from Chinese media outlets about the number of layoffs vary, with some outlets reporting layoffs of up to 1,500 employees since the start of 2022.

“We’ve decided to cut some operations and businesses of our company to survive. It’s a difficult decision,” Tao Zhang, founder and CEO of Pudu Robotics, wrote in a leaked letter to Pudu staff. 

The Robot Report reached out to Pudu Robotics for comment about the reported layoffs.

“Pudu Robotics has been working on regular organization optimization for the company’s sustainable growth,” Tia Han, overseas branding manager at Pudu Robotics, told The Robot Report via email. “The company’s business remains on track, and a new product release has scheduled for late July.”

Pudu’s layoffs follow news that Starship Technologies recently laid off 11% of its global workforce. The company, which has engineering headquarters in Estonia and business headquarters in San Francisco, said it has been negatively impacted by the “dramatic downward shifts” in the global economy and investment market.

Zhang cited similar downward trends in his letter to employees. Private equity investments in China have dropped to their lowest point in decades, according to reporting from the South China Morning Post.

“Since the end of last year, the global capital market has seen a drastic downward trend … As it is going to be a long-term trend, all the companies in the industry will have to face a problem: how to work out a profitable business model to gain profits and realize sustainable development as soon as possible,” Zhang wrote. 

A source who currently works at Pudu Robotics, but didn’t confirm the layoffs, told The Robot Report “the robotics market within China has become hyper saturated and competitive to the point that price is all that matters, meaning every deal is leading to price competition for the lowest price.” The source added that Pudu is “reducing its investment to look to overseas markets where price isn’t the only factor, and [the company] can compete on their engineering and support advantages.”

Georg Stieler, managing director of China for consulting firm STM Stieler, said Pudu is not the only struggling mobile robotics manufacturer in China.

“We heard from several companies [with more than 500] employees that they’re in a fight for survival at the moment as potential customers for factory and warehouse automation push back planned upgrades because of the worsening economy, while investment is becoming more difficult to find. They also said that they’re increasingly being squeezed by Hikvision’s robotics arm, which has been around for about a decade but which has suddenly became very active in the space of the last year, outbidding them for most contracts.”

Pudu closed its last funding round in September 2021. The Series C round totaled $155 million, and followed a $78 million round of funding announced in May 2021. The company brought in $102 million in earlier funding rounds. 

According to iFeng, a news outlet affiliated with Hong Kong-based Phoenix TV, Pudu grew rapidly in 2021. It started the year with around 300 employees, and in January 2022, Zhang mentioned in an interview released by the company that it had more than 2,000 employees. 

Pudu Robotics was established in 2016. It creates a line of autonomous mobile robots (AMRs) for the service industry. In March 2022, Pudu added four new robots to its line, three delivery robots and one cleaning robot. With the product launch, the company entered the Pudu Robot 2.0 era, expanding its product application areas from catering to buildings, healthcare, cleaning and other fields.

Below is the entire email reportedly sent out to employees. 

Editor’s Note: Mike Oitzman and Steve Crowe contributed to this story.