In 2019, Xerox made a big statement with its acquisition of Vader Systems, a New York-based start-up bringing to market a Liquid Metal additive manufacturing technology.
Liquid Metal was a development made by Scott and Zachary Vader, a father-son team, which uses wire feedstock to produce parts at ‘quick speed and low cost.’ Xerox saw it as a technology that could provide solutions to product development and supply chain, while also acknowledging it could harness its expertise in jetting, system design and product design to deliver robust 3D printing equipment to market.
Over three and a half years, Xerox commercialised the technology, hired the likes of Tali Rosman to lead the Elem Additive business unit, and installed the resulting ElemX printer in defence organisations, research labs and service bureaus.
Deployments of the ElemX were being announced at regular intervals, Xerox was still promoting the technology on socials as little as four weeks ago, and then news started to leak that there had been a significant shift in the business operations of Xerox Elem Additive.
Xerox has since confirmed that Elem Additive is being scaled back. But why?
What’s going on at Xerox Elem Additive?
Well, less than a few weeks ago.
When Elem Additive General Manager Tali Rosman appeared on the TCT Additive Insight Innovators on Innovators podcast in August, all seemed well with the company. The discussion centred around how 3D printing technologies, like Elem Additive’s Liquid Metal process, could have an impact in industries such as defence. Rosman and her co-participant Mike Pecota touched on the work Xerox had been doing with the US Navy, while Xerox had also announced several additional users in other sectors.
Then, in early October, a flurry of posts on LinkedIn seemed to point to a significant change at the company. Activity on LinkedIn from several Xerox Elem Additive employees suggested the company had made the decision to lay-off a significant number of staff, including the ‘majority of R&D.’ A Xerox spokesperson has since confirmed that, “On September 30 [2022], Xerox scaled back its Elem Additive 3D business and is now solely focused on supporting current installations.”
It comes just six months after Xerox stated in its annual financial report for the year 2021 that ‘we expect 3D to grow revenues rapidly in future years.’ As a publicly listed corporation, Xerox updates its shareholders regularly, with revenue and cash flow on a downward trend. As per its Q2 2022 financial results, revenue is down 2.6% year-over-year, while its operating cash flow is down 299m USD year-over-year to 85m USD, and its free cash flow is down 296m USD year-over-year to 98m USD. Since 2011, the company’s annual revenue has decreased by around 15 billion USD.
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Xerox is not alone in making reductions to its workforce in the 3D printing space in recent months. Redundancies have been made at Nexa3D in recent weeks, Desktop Metal announced 12% of staff were to be laid off in June, and it has also been reported manufacturing service Fast Radius is to cut its workforce by up to 20%.
Among those to be let go by Xerox Elem Additive are Rosman, as well as Senior Product Managers, Mechanical Engineers, Senior Metallurgists, Quality Technicians and Supply Chain Analysts.
So, what does that mean for the Elem Additive division at Xerox?
As Xerox’s spokesperson says, the focus is now on supporting current installations. These include ElemX machines deployed at the US Naval Postgraduate School, RIT, Siemens, Oak Ridge National Laboratory and Vertex Manufacturing. As per Rosman’s first appearance on the TCT Additive Insight podcast in February 2021, the wider Xerox Corporation is also an occasional user of Liquid Metal technology.
We are now in the process of looking and assessing all of these different businesses across the pipeline. Some of these will get through, and some of them will get rapidly shut down.
The departing R&D staff are also believed to have worked towards the development of IP around Liquid Metal technology, while Xerox had told shareholders in February that an ElemX2.0 was targeted for 'completion' in Q4 2022. This product was said to have the capacity to process Aluminium 6061, which would ‘increase the aperture of the industry verticals we’re going to get into at scale, which is the whole automotive and aeronautical industry.’
With the subsequent ‘scaling back’ of Elem Additive, and with Xerox not having a presence at IMTS or Formnext, it is now not known whether the company still intends to introduce this capability to existing users of Liquid Metal.
When did Xerox enter the AM space and why?
Xerox has had its toe in the additive manufacturing water for many years, contributing its printhead technology and capacity for materials and software development. In 2019, however, the company decided to submerge itself fully by acquiring the Vader Systems technology and pulling together various other assets and developments to form a ‘significant business.’
Speaking to TCT in June 2019, Kevin Lewis, Xerox’s Head of Business Strategy for 3D at the time, stressed that the ‘differentiation of the technology’ and that ‘Xerox’s expertise could be put towards helping that technology progress further,’ were among the key reasons for acquiring Vader Systems and its Liquid Metal technology. As noted by Vader Systems co-founder Scott Vader in the same interview, it was also important that the technology ‘supported true manufacturing.’ This element came up in Xerox’s 2019 Investors Day, when the acquisition was announced, as did the fact that Vader had already received ‘strong customer feedback from major manufacturers.’
At the time, Xerox also stated the Liquid Metal technology would provide a new way for the company to deliver more value to customers.
And why has Xerox decided to scale back its additive activity?
A Xerox spokesperson said: “As outlined at our Investor Day event earlier this year, the innovation studio model we have established enables us to quickly determine which businesses we continue moving forward with and which we scale down. This was a difficult, but necessary, decision.”
Xerox presentations at its Investor Day in February threw up many interesting titbits. Naresh K. Shanker, the Senior VP, CTO & Head of Palo Alto Research Center (PARC) at Xerox, spoke with much enthusiasm for additive manufacturing, suggesting the technology could enable distributed and localised manufacturing, as well as production on-demand. He also spoke in detail on the deployment of a Liquid Metal machine on a US Navy aircraft carrier, as well as software developments pertaining to its digital manufacturing endeavours and the aforementioned Aluminium 6061 capability.
“This is really an exciting business,” he said. “We’ve got it off the ground and we’ve got a tremendous amount of launches coming up in the second half of this year. Our goal right now is to double and triple the number of machines this year that we are going to be launching.”
But he also mentioned the ‘venture studio’ established within PARC. This concept, “helps us very quickly accelerate even more businesses across the pipeline. And what we use is a customer-led innovation process. The focus is to test and validate problem, solution, fit and product market fit early in the life cycle, so we can put the capital structures early on.”
He went on: “And this also helps us determine very rapidly what businesses we will move along the pipeline and just as quickly, what businesses we will shut down […] We've talked about Elem and Eloque that we launched, including Novity, and we are now in the process of looking and assessing all of these different businesses across the pipeline. Some of these will get through, and some of them will get rapidly shut down. And what's important is to make sure that we are very efficient around the use of capital in terms of how we progress these entities.”
Somewhere between its 2022 Investor Day and September 30, Xerox has made the decision to significantly scale back the 'exciting business' that was Elem Additive. At this stage, there is no indication that Xerox will make the technology available to new users through other avenues, but Shanker did say back in February: “The second key business benefit that we’ve derived from [the venture studio concept] is that we now have vehicles to actually take these businesses to market in the form of spin-outs, joint ventures and even licensing opportunities with regards to the technology.”
What have former Xerox Elem Additive employees had to say?
Those that have sought to update their employment status on LinkedIn have, in the main, expressed their disappointment at the decision and/or their pride at having successfully commercialised the Liquid Metal technology.
Bender Kutub, a Senior Product Manager at Xerox Elem Additive, noted, “it has been an amazing journey with the Elem Additive team, we accomplished a lot in [a] short period of time thanks to a great group of highly skilled and motivated individuals.”
Kevin Scofield, Director of Product Management at Xerox Elem Additive, said: “Xerox has made the unfortunate decision to cease all new development and sales of the Elem Additive product suite. While disappointing, it does not lessen the pride I have in bringing two new software apps (Navigator, Builder) from concept to launch in less that (sic) 18 months.”
Michael Lloyd, 3D Printing Quality Technician at Xerox Elem Additive, offered: “I was with many talented people [at Xerox] and I highly recommend, (sic) that any company pick them up.”
A Xerox spokesperson told TCT: “We are working to minimise the impact to the affected individuals and will provide transition assistance for those impacted.”
