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Desktop Metal Layoffs 2023: What to Know About the Latest DM Job Cuts

  • 3D printing company Desktop Metal (DM) is laying off 20% of its workers.
  • This follows a layoff in June.
  • Desktop Metal needs to turn a profit in 2023 to see 2024.
Desktop Metal layoffs - Desktop Metal Layoffs 2023: What to Know About the Latest DM Job Cuts

Source: Pixel B / Shutterstock.com

Desktop Metal (NYSE:DM), a 3D printing company, is laying off 15% of its workforce and closing four facilities.

Investors responded by buying DM stock, which rose almost 20% on Feb. 2. Desktop Metal opened Feb. 3 at $2.15 per share with a market capitalization of about $700 million.

Less Is More or Less

Desktop Metal implements computer designs directly in manufacturing. Its home page says the company exists to deliver the mass production vision of 3D printing, such as a recent German order worth $9 million.

The problem is cost. Its featured machine, the Studio System, is used in offices for rapid prototyping. For Desktop Metal to grow, it needs to mass produce parts at costs compatible with other methods.

For its September quarter, reported in November, Desktop Metal lost $60.8 million, or 19 cents per share, on revenue of $47.1 million. By the end of the period it was down to $72 million in cash and equivalents after losing almost $151 million in operating cash flow during the previous nine months.

The latest layoffs are expected to save $50 million. They’re the second in a year, as the company laid off 12% of its staff last June.

The consolidation came after Desktop Metal spent 2021 using cash and stock to buy other companies in the space. These included ExOne, Aidro, EnvisionTEC, Aerosint and Adaptive 3D. Most of the deals were made with Desktop Metal stock, which was trading at more than $30 per share early that year.

Bulls insist investors can now get Desktop Metal for the price they once paid for subsidiaries. The shares are up 57% since the start of 2023. They point to successes like an Icelandic maker of fish processing machines using Desktop Metal printers to make parts onsite instead of in Asia.

Bears point to the numbers.

What Happens After Desktop Metal Layoffs?

If Desktop Metal can’t create positive cash flow in 2023 it may not have a 2024. Sales are growing, but profits need to follow.

On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack.

Article printed from InvestorPlace Media, https://investorplace.com/2023/02/desktop-metal-layoffs-2023-what-to-know-about-the-latest-dm-job-cuts/.

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