Velo3D has announced a 30% reduction to its work force, with around 63 jobs globally to be lost.
The workforce reduction comes as the company attempts to ‘streamline its business operations, reduce costs and create further operating efficiencies.’
Velo3D expects to incur costs of between 1.1 million USD and 1.7 million USD of costs, relating to personnel expenses such as wages and other benefits. The majority of these cash payments will be paid out during the fourth quarter, with Velo3D expecting the redundancies to be completed by the end of October 2024.
This latest workforce reduction was announced by Velo3D CEO Brad Kreger in the company’s latest quarterly financial results. Those financial results showed Velo3D had continued to book orders of its metal additive manufacturing products, while working through 17 million USD worth of order backlog in Q2 of 2024. Around 40% of orders this year have come from existing customers, with around 20% coming from the defence sector.
Despite this, Kreger has pointed to ‘delays in the funding of certain governmental projects’ as a key reason for the 30% workforce reduction.
He said: “While we have made significant financial and operational progress year to date, we have made the difficult decision to right size the business as we expect industry conditions to remain challenging into the second half of 2024.
“Our second quarter results also reflected the impact of delays in the funding of certain governmental projects with those system orders now expected in the second half of the year. While we still expect to close these transactions, these delays have negatively impacted our revenue forecast for the balance of the year. As a result, we have instituted a number of material cost reduction programs to reduce expenses and manage our liquidity, including a headcount reduction of approximately 30%.
“We expect these programs to drive significant annual operating savings and we continue to look at various options to support our balance sheet during our ongoing the strategic review process.”
The redundancies are the latest development in a turbulent 12 months for Velo3D, which has seen changes at C-suite level, multiple NYSE noncompliance notices, and a 1-for-35 reverse stock split.
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