Argo AI, the driverless startup backed by Ford Motor Co and Volkswagen AG, laid off about 150 workers on July 7 as the young company ramped up too quickly and found itself overstaffed.

Argo confirmed the layoffs from a global workforce that has grown to more than 2,000.

“With incredible growth and progress made in our mission to deploy driverless vehicles, we are making prudent adjustments to our business plan to best continue on a path for success,” the company said in an emailed statement.

The self-driving startup founded in 2016 has been growing rapidly since VW invested US$2.6bil in 2020. That followed an initial US$1bil investment from Ford in 2017. Argo has been on a hiring spree as it aims to deploy 1,000 self-driving vehicles in six US cities in the next few years.

In May, Argo began testing self-driving vehicles in Miami and Austin, Texas, without a human behind the wheel. It also is testing its autonomous system with the public in pilot programs with Lyft Inc and Walmart Inc in Miami, Austin and Washington, D.C.

Argo said its plans to commercialise the technology for Ford and VW remain on track.

“Argo is a critical partner of our self-driving service,” Ford said in an emailed statement, “and we will continue to support them and work together on developing the self-driving technology that will power our self-driving service.”

 - Bloomberg