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Sarcos Technology and Robotics Corporation has recently announced a strategic shift in its business focus, pivoting from robotics to a more significant, near-term opportunity presented by its robotic artificial intelligence (AI) and machine learning (ML) software platform.

Laura Peterson, president and CEO of Sarcos, emphasized the crucial role of the software developed by the company over the years. “Since I assumed the role of CEO in May, our leadership team has conducted an ongoing rigorous, data-driven analysis and review of our business, market opportunities, products and development programs.”

“We believe that our AI software platform will enable, for the majority of the industrial robots being sold around the world, a dramatic reduction in robotic training times while also making industrial robots far more agile, meaning they can perform more tasks with greater variability similar to how humans can perform a wide variety of tasks.”

The vision for Sarcos’s AI software platform commenced in 2017 and progressed to its first CYTAR (Cybernetic Training for Autonomous Robots) government proposal in 2019. Chief technology officer Dr. Denis Garagić joined the company in 2020, initiating significant design and development work. The company plans to engage existing customers to determine the next steps in each relationship. The majority of Sarcos’ government contracts are related to AI software development and are key to the go-forward strategy. 

In 2022, Sarcos acquired RE2 Robotics, a Pittsburgh-based developer of autonomous and teleoperated mobile robotic systems, for $100 million. The company seemed to double down on this acquisition earlier this year when it announced a number of changes to the company that aimed to grow revenue and leverage strategic opportunities that show the greatest market traction and meet customer demand. These changes included focusing on robotic systems for subsea, aviation, and the solar end market. 

Sarcos has secured AI software development contracts with the U.S. Air Force, providing funding for the platform’s development and opportunities for real-world testing. Peterson anticipates bringing a version of the AI software platform, compatible with most industrial robots, to market in the first half of 2024, with additional features planned for release by the end of next year.

To align with this strategic shift, Sarcos is suspending commercialization efforts on its subsea, aviation, and solar robotics hardware programs. “With the need to ensure we have sufficient financial resources to pursue our software opportunity, we have made the difficult decision to suspend for the foreseeable future commercialization efforts on our subsea, aviation and solar robotics hardware programs,” Peterson noted.

The company told The Robot Report that by suspending the commercialization efforts on the subsea, aviation, and solar robotics hardware programs for the foreseeable future, it intends to target these markets through the AI/ML software platform. Furthermore, Sarcos’ robots will be used for further development and testing of its AI/ML software. The company said that this software platform will enable a dramatic reduction in robotic training times while also making industrial robots far more agile.

Sarcos said this strategic decision will allow it to reach a broader market more quickly by separating its AI and ML software from its robotic systems. “By de-coupling our AI and ML software from our own robotic systems, we believe we can reach a much broader market more quickly,” Peterson said.

Laying off 150 employees

The product portfolio shift necessitates a reduction in Sarcos’s workforce by approximately 150 employees. Peterson acknowledged the difficulty of such decisions, stating, “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.”

It has been a tumultuous year for Sarcos as this announcement follows a layoff of 75 individuals from the company in July 2023 and the hiring of Peterson in May 2023 to replace prior CEO Kiva Allgood. Third quarter 2023 net loss was $29.0 million or $1.13 per share, compared to a net loss of $22.5 million or $0.89 per share in the third quarter of the prior year. Revenue is down, as total revenue in the third quarter of 2023 was $1.8 million, compared to $4.7 million in the third quarter of 2022. According to the latest financial report, revenues decreased on a year-over-year basis due to fewer product development contracts being worked during the current year, offset slightly by an increase in product revenue.

In August, the company reported $1.3M in revenue during Q2 2023 against a loss of $28.7M. The company has struggled to achieve profitability since going public via SPAC in September 2021. Also in August, Sarcos also announced it signed an agreement with Blattner Company to develop its autonomous robotics solar construction system further. The company is abandoning this effort as part of the restructuring.

Closing Pittsburgh office

To further align with the strategic pivot, Sarcos plans to close its Pittsburgh office (the original RE2 headquarters) and consolidate operations in Salt Lake City. Peterson emphasized, “We believe the prioritization of our AI software platform meets our previously announced goal of pursuing significant near-term revenue tied to acute customer needs, reduces our capital requirements and related risks in line with available resources, and will lead to long-term stockholder value creation.”