Stratasys announced a workforce reduction due to the impact of COVID-19.
The company, one of the few publicly-traded 3D printing companies, said the changes will affect near 10% of their permanent staff. They say:
“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.”
What does Stratasys get from this move? They say the savings from the drop in staff levels will amount to approximately US$30M per year going forward, but this year they will have to pay out near US$6M in severance to those leaving the company.
Since they are doing the move in second and third quarter, they won’t gain the entire US$30M in savings this year. Probably it will be US$15M or less, with a deduction of the USD$6M in severance. So we’re looking at a 2020 reduction in spending of something under US$10M. That’s significant, but will obviously be more in 2021.
But could this move slow down Stratasys’ progress? They say it will not, as CEO Yoav Zeif says:
“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.”
That’s excellent news, and suggests the company might have been due for a resizing even without the crisis: if projects can continue unheeded, then were those staff actually needed in the first place? On the other hand, it is likely that Stratasys is quietly shutting down some internal projects that we don’t know about.
In our recent story on Stratasys’ relationship with Xaar, this reduction in staff may reflect a strategy to increase leverage of other companies rather than produce additional products internally.
While many 3D print companies I’ve recently spoken with say they are maintaining or even growing their staff, it seems Stratasys is going the other direction. I suspect this is mostly due to the age of the company and the accumulation of staff and projects they’ve incurred over recent times.
One question looms as a result of this announcement: will other large 3D print companies do a similar move? Will, for example, 3D Systems announce layoffs? I have no insider information on that, but it’s clear their leadership would be at least evaluating their situation in the current environment.
Ex Stratasys Staff
Clearly this is not welcome news for those affected by the resizing, as they’ll now be looking for new work. But there is a silver lining in this black cloud as the 3D print space is generally growing even amidst the crisis. It is a frequent occurrence that those leaving a company often find themselves involved with new startups in 3D printing.
In fact, most of the startups I meet with are staffed at least partially with folks previously employed by the “big guys”. These people are quite valuable as they can bring years of industry experience, connections and know-how to a fledgling company that might otherwise be staffed with novice entrepreneurs and academics. The experienced staff can make startups far more successful.
And this is a big tip for 3D print startups: go looking for the ex-Stratasys people. You may find someone who can vastly help your organization. Get them before someone else does!