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3D Systems has announced it is to reduce its workforce by 20% in a ‘difficult but essential step’ to ‘better position the company for sustainable and profitable growth’.
The redundancies, the majority of which will be completed by the end of the year, will contribute to the reduction of operating costs by $100 million per year, according to the company.
3D Systems' lay-offs come after the release of 3D Systems’ second quarter financial results for 2020, which showed revenue had decreased by 28.7% compared with the same period last year and 16.8% compared to the first quarter of 2020. 3D Systems cited the continued impact of the COVID-19 pandemic as a primary reason for its poor financial performance, despite it ‘demonstrating a clear role for flexible supply chains enabled by additive manufacturing.’
The financial struggles of 3D Systems through the last few months has led the company to adopt a ‘new strategic focus’ with plans ‘reorganised and restructured’ to focus especially on the healthcare and industrial markets and with its global workforce reduced significantly. This restructuring and the subsequent redundancies represent the first major issue that new CEO Dr Jeffrey Graves has had to address. The decision, which is similar to that announced by Stratasys in June, was made after reviews and discussions with employees and key customers.
“To accelerate value creation for our customers, we are simplifying and focusing our organisation by realigning the company’s breadth of capabilities into two key vertical markets: healthcare and industrials. Each of these teams will drive application-specific solutions within these market verticals,” commented Graves. “In connection with this organisation’s realignment, we have an opportunity to maximise efficiencies with a need to align our operation costs with current revenue levels. As such, we will reduce our workforce by nearly 20%, with the majority being completed by year-end. This reduction in force is a difficult but essential step in our ongoing strategic process, designed to better position the company for sustainable and profitable growth. I would like to express my appreciation to each of the employees impacted by this decision for their dedicated service.”
3D Systems expects to incur a cash charge in the range of $25 to $30 million for severance, facility closing and other costs, primarily in the second half of 2020, with additional charges in 2021 also possible. The company is also evaluating divesture of parts of the business that do not align with its new strategic focus.
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