Sudden layoffs have struck 3D printer manufacturer Nexa3D.
While there has been no official announcement from the company, it appears that multiple people at the California-based company have been let go this week. The changes have been completed so rapidly their website, as of this writing, still displays some staff that have apparently already departed.
How many have been let go? Without official notice, it’s hard to say, but there is anecdotal evidence the layoffs were substantial. A cruise through LinkedIn shows multiple roles departing in the July-August 2022 range. Roles include product management, marketing, business development, engineering, technical and even the head of China operations. There may even be more, as some haven’t yet updated their LinkedIn profiles.
In the absence of anything official, we must speculate on what’s happening, and whether this is something affecting the entire 3D print space.
To me this has been a bit of a surprise, as all indications showed that Nexa3D was flush with cash. They had been hiring, are about to launch a new product line, and even had what seemed to be the largest booth (and likely most expensive) at Rapid 2022.
One point might be that at this time of year most companies are publishing their quarterly results for the April-June period. It may be that Nexa3D had poor financial results that triggered upper management to rapidly cut costs to compensate for lower-than-expected earnings. This can happen if executive bonuses are tied to specific result levels — you don’t want to miss out on your bonus, right?
Nexa3D management may also be anticipating an upcoming recession, and could be taking preemptive action to reduce internal costs before it’s too late. I suspect this possibility is unlikely, as the rapid nature of this layoff event suggests something more urgent. I’ve also heard predictions that a recession, if it comes, is likely to be relatively short.
The AM industry may be somewhat immune to recession effects, however, as the increasing shift from overseas production to regional manufacturing requires some investment in additive technologies. For this reason, many 3D printer manufacturers have actually been booming in recent months.
For these reasons, I suspect the event behind the Nexa3D layoffs is most likely to be unexpectedly low sales results. That is also concerning, as many 3D printer manufacturers have been doing quite well recently. Why would Nexa3D not be one of them?
This is a bit puzzling, as Nexa3D has an excellent product set with some unique technologies. Their latest device, the XiP, is specifically designed to be easy for operators and is relatively low cost for units in its class. Why wouldn’t it sell well?
One possibility is that inexpensive resin 3D printers could be eating up part of this market. It could be that some buyers are thinking they could buy 10X or even 50X as many cheaper units than the more expensive equipment. If the goal is production, then you would get a lot more throughput with parallel operation, especially if you are willing to pay for the manual labor for operation.
We may never know the real reasons behind the Nexa3D layoffs, but there’s clearly something going on at the company.
Could we see layoffs at other companies? Time will tell.