Desktop Metal Inc. announced that it will lay off 12% of its workforce and focus on global facility consolidation in order to cut costs. This decision follows and is related to a series of acquisitions made in the last year.
According to the company statement, it expects to incur a one-time charge of approximately $14 million related to termination benefits, the majority of which will be incurred in the second quarter of 2022. This excludes lease termination fees.
Desktop Metal Acquisitions
Desktop Metal is a publicly traded company based in the United States that manufactures metal and carbon fiber 3D printing systems. Its goal is to make 3D printing affordable for all engineers, designers, and manufacturers. It offers materials and software solutions in addition to printing systems.
Over the last year, the company has been involved in several high-profile acquisitions aimed at consolidating its market leadership position while also broadening its scope of operations to serve a diverse range of industries.
ExOne, Aidro, EnvisionTEC, Aerosint, and Adaptive3D are among the major acquisitions. The initiative has been implemented to bring the company’s operational structure and its acquired portfolio of brands under the company’s corporate umbrella – engineering, manufacturing, finance, legal, human resources, and customer service will all be fully consolidated under Desktop Metal.
“In 2021, we demonstrated significant growth, expanding our portfolio of products into new markets and innovative materials. While the acquisitions we completed in 2021 contributed to this growth and to our total market opportunity as we focused initially on harvesting product and go-to-market synergies, they also increased our cost base and global facilities footprint. Today’s announcement of our strategic integration and cost optimisation initiative is the result of a comprehensive portfolio and business operations review conducted across all functions at Desktop Metal.
– Ric Fulop, Founder and CEO of Desktop Metal
Desktop Metal expects its cost-cutting strategy to be substantially completed by the end of 2023. The plan is expected to save about $40 million in annualized run rate adjusted costs and at least $100 million in total costs over the next 24 months.
According to the company, it is still reviewing international workforce changes, but the impact on the US workforce will be announced to employees on Monday.
As of March 31, Desktop Metal had more than $317 million in cash, cash equivalents and short-term investments.
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