Desktop Metal has reduced its workforce by 20% as part of an additional 50 million USD cost reduction plan.
This latest cost reduction plan is the third to be announced by Desktop Metal since the company listed publicly on the New York Stock Exchange. In June 2022, Desktop Metal laid off 12% of its workforce, with an additional 15% of staff being made redundant in February 2023.
The cost reduction measures have been implemented in a bid to ‘accelerate its path to profitability.’ As Desktop Metal strives to become profitable, it has also suggested it will look to continue the consolidation of its facility footprint and product rationalisation.
This latest action is expected to result in pre-tax restructuring charges of between 24.3 million SUD and 31.5 million USD, with all but between 5.3 million USD and 7.5 million USD non-cash charges.
“The cost-reduction plans announced today, in addition to the $100 million in cost reductions realised in 2023, will help us generate positive cash flow in light of a softer demand environment,” commented Ric Fulop, Founder and CEO of Desktop Metal. “We are committed to getting profitable during this challenging period. The vast majority of the cuts will be completed this quarter, resulting in sequential cost reductions across the first half of 2024.
“While our industry is working through a challenging period, Desktop Metal’s commitment to its Additive Manufacturing 2.0 vision has not changed. We continue to have a positive long-term outlook for this industry as it transitions to mass production.”
Desktop Metal is notifying US-based employees impacted by the workforce reduction on January 24th, with the company continuing to review international workforce changes. Further details regarding the latest cost reduction efforts in Desktop Metal’s regulatory filings and end-of-year earnings release, which are expected to be executed by the end of March 2024.
In November 2023, Desktop Metal received a noncompliance notice from the New York Stock Exchange after the average closing price of its common stock fell below 1.00 USD over a consecutive 30-day period. The company’s stock value has remained below 1.00 USD since October 24, 2023 and currently stands at 0.73 USD (January 24, 2024). Desktop Metal's stock value dipped below the 1.00 USD mark shortly after the company's merger with Stratasys fell through in September. Initially announced in May 2023, it was expected that Stratasys would complete its acquisition of Desktop Metal before the end of last year, but Stratasys shareholders vetoed the transaction at an Extraordinary General Meeting of Shareholders. Desktop Metal then indicated it would look to move forward as an independent company.
