3D printing company Stratasys announced it is downsizing its global workforce due in part to the impact of COVID-19 and the consequent economic slow down. The decision to transition to a “leaner operating model” will reportedly affect about 10% of the company’s employees.
The company’s decision to let go of a significant portion of staff will enable it to focus on profitable growth and is described as an “essential step in [its] ongoing strategic process.” The downsizing of its workforce will take place mostly in the second quarter (i.e. before the end of the month). The reduction phase will be complete in the third quarter.
“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,” commented Yoav Zeif, CEO of Stratasys. “I would like to express my appreciation to each of the employees impacted by this decision for their dedicated service. Current conditions make the job market even more challenging, and we have done our best to provide the departing employees globally with a respectable and fair separation. This measure is not expected to affect the progress on our forthcoming product launch plans, which remain a top priority as we lead the industry to new heights with our best-in-class additive manufacturing solutions.”
By making 10% of its global workforce redundant, as well as by implementing other cost-mitigating measures, Stratasys expects to reduce annualized operating expenses by about $30 million. Severance costs are expected to be about $6 million.
The resizing strategy comes weeks after Stratasys announced its first quarter 2020 financial results. The company saw a reduction in revenue of 14.4% (from $155.3 million to $132.9 million), which it says is primarily due to the impact of COVID-19 on Stratasys clients.
“We are well-prepared to manage the downturn with a strong balance sheet and focus on cost control and cash generation,” said Zeif in mid-May. “We have over $325 million in cash and equivalents and no debt. Our engagement level with our customers remains high and the demand for our systems is strong. It’s clear that this crisis has helped generate significant awareness that 3D printing is becoming essential for accelerating and improving design, speeding up time to market and production, and creating less dependent and more resilient global supply chains, including localized digital inventory and distributed manufacturing.”
It is an undeniably challenging time, especially for staff that have lost their jobs in the midst of the pandemic. For those that have been impacted, AM recruitment firm Alexander Daniels Global has put together a collection of useful employment resources.