Robotic and software manufacturer Symbotic has ceased operations at its manufacturing facility in Montreal, Quebec, and reduced manufacturing capacity at its facility in Wilmington, Massachusetts, CFO Tom Ernst said in a May 1 release.
The company will instead outsource its manufacturing, part of a broader operational restructuring plan, Ernst said in a May 1 earnings call. The outsourcing will allow Symbotic to drive system deployment growth as well as set the company up for long-term cost savings.
“During the quarter we advanced our transition to outsourcing partnerships to successfully complete installations of our current system at multiple customer sites and achieved a three-fold increase of deployments in progress since last year,” CEO and Board Chair Rick Cohen said in a statement.
The company spent $8 million on restructuring last quarter, including changes to inventory, facilities and equipment and $3 million in severance payments to just over 100 employees and 100 contractors, Ernst said.
The CFO noted that the company will begin seeing the savings benefits of the cost-cutting plan in Q3.
“We also expect that our work with these partners in terms of collaboration and communication is going to benefit our mutual operations together over time,” Cohen said during the May 1 call. “And so, this is something that we think will provide opportunity to improve our efficiency over a multi quarter timeframe rather than just a multi-week timeframe.”
As the robot manufacturer works on cutting costs, it continues to grow its distribution portfolio. Symbotic signed a commercial agreement on May 8 with wholesale distributor Associated Food Stores to implement robotic warehouse automation technology in a Utah distribution center.
The agreement is one of several Symbotic has signed over the past year. In September, it signed a deal with United Natural Foods to integrate robotics into five of its distribution centers. Last May, it expanded its work with Walmart, bringing Symbotic tech to the retailer’s 42 distribution centers.