Warehouse robotics leader Locus Robotics is the latest to feel the pinch of declining investment in the sector, confirming this week that it conducted targeted layoffs within its sales and marketing departments.

CEO Rick Faulk stated the cuts aim to align staffing with "market realities" as the pandemic-driven e-commerce boom cools off. He admitted both Locus and its customers had overestimated sustained growth trends.

Founded in 2014, Locus provides collaborative autonomous mobile robots (AMRs) under a robotics-as-a-service (RaaS) model. Despite reaching new deployment milestones last year, the Wilmington, MA-based company has adjusted financial expectations like others in the industry.

Industry data reveals easing demand after white-hot adoption years. North American robot orders dropped 37% in 2022's second quarter year-over-year per the Association for Advancing Automation. Warehouse construction also slowed 25% according to Interact Analysis.

And while warehouse automation remains a growth area, the AMR space has seen consolidation with distressed exits like Shopify selling 6 River Systems. Competitor IAM Robotics also pivoted and rebranded due to commercialization challenges.

"It's a little slower than expected for some segments with accounts across retail and e-commerce making adjustments," said Faulk. "Both we and customers were too optimistic exiting COVID, and some trends have flattened."

"We want to align costs and right-size go-to-market teams for the next few quarters," he added regarding the undisclosed number of layoffs.

Still, Locus can point to 2022 success stories, including DHL Supply Chain deploying 5,000 additional robots. Other highlights were breaking ground on a new global headquarters and adding c-suite leaders for expansion.

"Locus has an incredibly strong balance sheet and investor base," Faulk affirmed. "We're still hiring for key roles and have a little under 500 employees now."

He also noted record holiday peaks, with Locus robots picking over 331 million units in November and December. That translates to nearly 7 million picks daily.

While paring back expectations amid erratic market forces, Locus remains confident in the long-term shift toward warehouse automation. Ongoing labor shortages and consumer delivery demands bode well Faulk stated.