Stratasys, the marketplace leader in industrial fused deposition modeling technology, has announced that it is laying off 10 percent of its workers worldwide. In a statement, the company seemed to suggest that this workforce reduction was not necessarily related to COVID-19, but that the pandemic caused the plan to be implemented sooner:
“This resizing, advanced sooner due to the impact of COVID-19, will affect approximately 10% of employees, and is designed to reduce operating expenses as part of a cost realignment program to focus on profitable growth. The company expects the vast majority of the reduction to take place in the second quarter and to complete the reduction during the third quarter of this year.”
Since the 3D printing stock market bubble burst in 2014, publicly traded additive manufacturing companies have struggled to regain their footing. At 3D Systems, former CEO Avi Reichental stepped down and was replaced by Vyomesh Joshi who, after seemingly putting the firm back on track, has also stepped down.
Stratasys and its MakerBot subsidiary have cycled through executive leadership much more rapidly, executing multiple rounds of layoffs at MakerBot. Stratasys CEO David Reis was replaced by Ilan Levin in 2016, who resigned in 2018. Now, Yoav Zeif acts as Chief Executive Officer. Of the layoffs, Zeif said:
“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. 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.”
Stratasys revenues declined 14 percent in Q1 compared to last year. The company believes that, by eliminating labor, it can reduce operating expenses by $30 million, though it will pay out $6 million in severance costs. The 3D printing company is hardly the only one in the additive industry or in industry at large suffering economically at the moment. Numerous AM firms have reported lowered revenues due to the COVID pandemic, with those who have recorded order backlogs from 2019 warning of weaker second quarters.
While layoffs have come to be par for the course during economic downturns, it is not a prerequisite to the survival of a business, though that may depend on the size of the firm. Stratasys is much smaller than the $13B Mondragon Co-Operative Corporation, which avoids displacing workers by relocating them from one area of the business to another. In turn, the company was able to weather the 2008 financial crisis. In 2013, Mondragon’s largest manufacturing company went bankrupt. Instead of instituting layoffs, the employee-owners voted to take small pay cuts and relocated 2,000 workers across the larger business group.
The workforce reduction comes at a time when the U.S. is facing a 21.7 percent unemployment rate, which is potentially adding fuel to the wave of protests against police violence the country is experiencing. Given the current economic situation, it would not be surprising if we see other 3D printing companies execute similar decisions in the near future.
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