Sarcos Robotics, a Salt Lake City-based robotics company, is laying off 150 employees, nearly half of them in Utah — as part of a strategic shift away from robot hardware and toward artificial intelligence and machine learning software.
The reduction in the company’s workforce was announced in Securities and Exchange Commission filings and new releases made in November, as part of the company’s continued “streamlining.” The job cuts represent roughly two-thirds of the company’s total workforce, leaving around 60 or 70 employees remaining.
Hardware isn’t lucrative enough, CEO Laura Peterson said in a news release at the time, and the company has been losing money for years. A financial report for Sarcos’ third quarter of 2023 showed a net loss of $29 million that quarter, and a net loss of $22.5 million in the same quarter of 2022. Revenue was also down, the report said.
“While it is always a difficult decision to make staffing cuts, especially one this significant, it is important that Sarcos is resourced appropriately and that we are good stewards of our capital,” Peterson said in the news release.
Sarcos’ hardware products have included robotic arms for deep-sea exploration and robotic weapons it was contracted to make for the U.S. Army.
“With the consideration of our cash position, as well as third party dependencies, customer decision timing, and the cost and time to achieve a significant and steady revenue stream from our hardware products, it was clear that we should adjust course rapidly to right size the company and get our cash usage down to a level that we believe will provide the best opportunity for success with our available resources,” Peterson said in the release. “We made the decisions to suspend our hardware commercialization efforts, implement a significant reduction in force and focus our resources on our AI/ML platform.”
Peterson will leaving the CEO job soon, to be replaced by cofounder and former CEO Ben Wolff, the company announced Wednesday. Wolff will take over Feb. 23. Peterson will stay on as executive vice chairman and will serve on the board of directors.
Layoffs started in November; Sarcos filed a WARN notice with the state of Utah that 70 Utah employees would be affected by Jan. 16. The company also announced plans to close its Pittsburgh office and “consolidate” its Salt Lake City operations.
It was the second layoff in roughly six months, according to SEC filings. The company also had laid off roughly 71 workers in July, accounting for nearly a quarter of its workforce.
It’s all part of Sarcos’ plan to make money by pivoting away from robotic bodies and into their brains, according to news releases.
Peterson led the charge to position AI as more than just a “value add” to hardware, and instead make it the company’s primary product, Wolff said in a news release Wednesday. Wolff will continue on that path, he said, and “continue to work on reducing expenses to give the company the financial runway it needs to reach profitability.”
Meanwhile, three company executives just received cash bonuses worth at least half their base salaries as part of a “retention plan,” according to a recent SEC filing.
Sarcos’ chief legal officer and its chief revenue officer were given bonuses worth 50% of their salaries at the end of 2023, which they keep as long as they stay with the company until the end of 2024. The chief technology officer got a 75% cash bonus under the same condition.
The board also approved target bonuses for three other executives should they stay with the company through the end of the year.
The bonuses, according to the filing, are meant to “incentivize and align executive officers with stockholders and support retention.”
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.
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