MakerBot has announced that it will no longer manufacture its own hardware. Over the course of the next six months, the company will transition the building of its 3D printers and other products to Jabil, a contract manufacturer with facilities in China. As a result, the company will shut down its manufacturing operations in the Industry City complex in Brooklyn, NY, and will part ways with an undisclosed number of staffers. MakerBot's headquarters and its other teams — namely design, engineering, logistics, and repairs — will remain in Brooklyn.
"It’s a specific, painful decision in the sense that we’re going to have to let some people go, but it’s captured over a much broader strategic decision, which is a very important one and a very positive one for MakerBot in the long term," Jonathan Jaglom, MakerBot's CEO, tells The Verge.
MakerBot has a lot more competition these days
Jaglom says he's trying to put MakerBot in a position to meet the consumer demand it expects will crop up in the near future, while also continuing to compete with other startups that are selling increasingly cheap 3D printers. "We need to be able to manufacture printers on a much higher volume in the coming years," Jaglom says.
Companies like MakerBot have struggled to establish a consumer market since the awareness of 3D printing boomed a few years ago. MakerBot tried, unsuccessfully, to reach general consumers through partnerships with stores like Home Depot and Micro Center. The company even opened retail stores of its own, but those have since closed.
The company also shifted much of its focus to educational and industrial pursuits. ("It's hard to manage the expectations of people who saw the magic of this technology and wanted it to be easy," Jenny Lawton, the former CEO of MakerBot, told The Verge at CES last year.)
MakerBot expanded its presence at Industry City less than a year ago
But at the same time, MakerBot was working on expanding the space it had been leasing since 2013 in the 170,000-acre Industry City complex. When MakerBot officially opened up its new digs there last summer, the company doubled its production capacity. And a large part of Jaglom's interactions with the press centered around the company's commitments to its New York City roots.
"The singlemost thing that we are very proud of is that it’s all happening in Brooklyn," Jaglom said at the ribbon-cutting ceremony. "The launch of factory here today... is just evidence to the fact that we expect and are committed to remaining here."
MakerBot isn't the first company to do this, but Brooklyn is part of its identity
Asked how he will reconcile those claims with the staff after today's announcement, Jaglom says he will point to other companies, like Apple, that design in the United States but manufacture elsewhere. "If we play our cards right — and I’m sure we are, we’re doing a lot of great things here — over time, the company will grow further, and through that growth we will bring more talent under our rooftop," he says. "Our DNA and our culture very much remains a Brooklyn one, we’re very proud to be here in Brooklyn."
The change is also likely to rankle the die-hard MakerBot fans, who have become increasingly frustrated with the company over the years. The company, which was founded in 2009, turned away from making open-source 3D printers in 2012, and soon after was acquired by 3D-printing giant Stratasys.
During the last round of layoffs in October 2015, MakerBot announced that it was leaving one of the Industry City buildings the company occupied. When asked how much more floorspace it plans to cut after today's announcement, Jaglom would not go into detail.
Last month, however, Crains reported that MakerBot was relinquishing some 90,000 additional square feet at Industry City. While the Crains report framed this as fallout from the October layoffs, it appears now that this is directly related to today's announcement. This means MakerBot will occupy 135,000 square feet at Industry City going forward, almost half the amount of space it occupied last summer.
"We’ve done a lot of great things here in Brooklyn," Jaglom says. "But we are really following a global trend, which has been around for many years now, whereby we’re stepping away from manufacturing in Brooklyn."
Update April 25th, 2:28PM ET: MakerBot has disclosed the name of the contract manufacturer that it's partnering with. The story has been updated to reflect this new information.