Velo3D to lay off 30% of its workforce as part of a cost-cutting program
63 employees will lose their jobs
Velo3D, the belowed American manufacturer of industrial metal 3D printers, has released its financial results for the second quarter of 2024, and they turned out to be disastrous. Revenues dropped to $10.3 million, compared to $25.1 million in the same period last year. At the same time, the operating loss amounted to -$21.7 million, remaining roughly at the same level as the previous year.
To rescue its sinking finances, Velo3D announced a 30% workforce reduction, which means about 63 jobs will be lost worldwide. Officially, the company describes this as an effort to "streamline business operations, reduce costs, and increase operational efficiency."
Velo3D expects to incur costs between $1.1 million and $1.7 million related to severance and other benefits for the laid-off employees. Most of these costs will be incurred in the fourth quarter of the year. Velo3D anticipates that the layoffs will be completed by the end of October 2024.
Velo3D is currently working on fulfilling orders worth $17 million. Approximately 40% of these orders come from existing customers, with around 20% from the defense sector. The company's CEO, Brad Kreger, points to "delays in funding for certain government projects" as a key reason for the 30% workforce reduction:
While we have made significant financial and operational progress year to date, we have made the difficult decision to right size the business as we expect industry conditions to remain challenging into the second half of 2024. Our second quarter results also reflected the impact of delays in the funding of certain governmental projects with those system orders now expected in the second half of the year.
While we still expect to close these transactions, these delays have negatively impacted our revenue forecast for the balance of the year. As a result, we have instituted a number of material cost reduction programs to reduce expenses and manage our liquidity, including a headcount reduction of approximately 30%.
Velo3D is still considering various business development options as part of an ongoing strategic review process. The layoffs are yet another negative development for the company over the past 12 months, during which time there has been a complete management overhaul, multiple non-compliance notices from the NYSE, and a necessary 1-for-35 reverse stock split.
Source: www.velo3d.com