Dive Brief:
- Origin Materials will reduce its workforce by 30%, about 60 positions, as part of an “organizational realignment” to streamline operations and focus on near-term, high-margin priority initiatives. The “carbon negative materials” company announced the actions in a filing with the U.S. Securities and Exchange Commission on Friday, and it indicated in a news release that it largely completed layoffs on Monday.
- In its third quarter earnings release earlier this month, Origin reported $7.1 million in revenue and $12.9 million in operating expenses. The company emphasized that it was “implementing a rigorous cash conservation program” while “prioritizing revenue-generating projects” to achieve positive earnings before interest, taxes, depreciation and amortization.
- Origin now expects its full-year revenue for 2023 to be $25 million to $30 million, down from earlier expectations of $40 million to $60 million. That’s partly due to intentionally scaling back certain operations and partly because some joint development projects were delayed to next year.
Dive Insight:
Origin Materials, which makes intermediate plastic components, has seen numerous advancements coupled with operational changes in 2023.
The West Sacramento, California-based company began operations in June at its first manufacturing facility for components that can be used in packaging and achieved commercial-scale production at that Ontario, Canada plant in October. In September, the company was among the named recipients who would share $18.7 million in funding for projects to advance the Department of Defense’s supply chain resiliency and sustainability.
Along the way, the company also disclosed notable delays and an executive change-up. This is the first earnings reporting cycle with new CFO Matt Plavan. He took over the role on Oct. 30 from Pam Haley, who temporarily served as CFO following former CFO Nate Whaley’s departure this summer.
In August, the company announced a scope change for Origin 2, its second planned production facility, that would change the material it makes and delay construction completion by up to two years. Later that month, a plaintiff filed a lawsuit against the company and its executives claiming the scope change constitutes securities fraud because of the company’s alleged false or misleading claims that misguided investors who purchased shares this year.
The company’s update on Origin 2 in its Q3 earnings report said the project “continues to advance with an appropriate focus on optimal funding strategies.” The earnings report indicated the next step is to revise the front-end engineering design, and the company would give another update “when appropriate.” The company previously said Origin 2 would result in the creation of 200 full-time jobs in Louisiana.
The realignment notice mentions that certain research programs would be deferred, but the company will not specify which ones, a spokesperson said via email. Opportunities to generate cash include funded joint development agreements, continuing to apply for government grants and developing other unique technologies and products, the spokesperson said.
The company will not disclose which geographic locations will be affected by the reduction of employees, the spokesperson said, but it does not expect disruptions to Origin 1’s operations. The spokesperson said Origin Materials will assist outgoing employees with finding new jobs.
“This was a difficult decision that involves parting ways with many talented team members who have committed themselves to our mission,” said co-CEO John Bissell in the news release, noting that the cost-cutting actions “will substantially extend our cash resources while maintaining momentum with our partners.”
