Additive manufacturing technology company Desktop Metal announced an additional $50 million cost-reduction plan that includes a 20% workforce reduction that the company said will "align its cost structure to current market dynamics."
The effort is part of a broader strategic business review and other actions, including continued consolidation of facilities and product rationalization.
“The cost-reduction plans announced today, in addition to the $100 million in cost reductions realized in 2023, will help us generate positive cash flow in light of a softer demand environment,” said 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.
“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.”
Desktop Metal is notifying U.S.-based employees impacted by the cuts today. The company is continuing to review international workforce changes, the timing of which will vary according to local regulatory requirements.
This latest action is expected to result in pre-tax restructuring charges of $24.3 million to $31.5 million. The majority of those estimated charges are non-cash, with an estimated $5.3 million to $7.5 million of the restructuring charges coming from cash reserves.
DM continues 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.