Desktop Metal announces $50M savings plan and 20% workforce reduction
Desktop Metal, Inc., headquartered in Burlington, Massachusetts, USA, has announced a cost-saving plan of $50 million that includes a 20% reduction in its workforce. The move is said to be part of a broader strategic business review aimed at improving its profitability. Other actions include continued consolidation of facilities and product rationalisation.
“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,” stated 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.”
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“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,” Fulop continued.
Desktop Metal is notifying US-based employees impacted by the cuts. The company is continuing to review modifications to its international workforce, the timing of which will be subject to local regulatory requirements.
This recent action is anticipated to lead to pre-tax restructuring charges of $24.3 million to $31.5 million. The majority of these expected charges are non-cash, with around $5.3 million to $7.5 million of the restructuring charges coming from cash reserves.
Desktop Metal said it is continuing to invest in products and operations in line with near-term revenue generation, positioning the company to achieve its long-term financial goal of sustainable profitability.
The company will provide further details about these changes in its regulatory filings and end-of-year earnings release and conference call, which is expectedbby the end of March 2024.
