Friday, April 22nd 2022
EKWB Lays Off 25% of Workforce, Blames Lower Watercooling Sales
EK Water Blocks, possibly the most notable manufacturer of DIY PC cooling solutions, has downsized a quarter of its staff in response to a sharp drop in sales. This affects over 60 of the 200+ tech jobs in Slovenia, the home country of EKWB, something it proudly flaunts. EKWB sees its sales principally split in half between the North American and European markets. The company's market-presence in Asia is limited at this time, although it is now a reinvigorated area of interest. The company noticed quarterly sales-drops in steps as big as 20 percent since October 2021, according to Slovenian press reports.
The company is faulting these sales drops on the COVID-19 pandemic, specifically its economic impact, spike in PC hardware prices, and people spending less on premium/novelty hardware that EKWB principally specializes in—DIY liquid cooling solutions. The company also noted the impact of the war in Ukraine causing various commodity shortages for manufacturers in Europe. Matjaž Krč (CEO, EKWB) in a statement even blamed the sociological impact of COVID-19, specifically gaps between pandemic waves that enable people to travel and enjoy the outdoors—not wanting to spend on things that keep them indoors, such as gaming.
It's pertinent here to add some context to this situation. EKWB had observed consistent financial growth over the past five years, including the pandemic quarters leading up to Q4-2021. The company was awarded by Slovenian chambers of commerce for its consistent growth and fiscal prudence. The company even expanded its payroll in 2021, by recruiting 64 new employees.
TechPowerUp spoke with EKWB and received this official statement from the company:
TechPowerUp: What was the time period that this 25% reduction is based on? Some ex-employees are claiming closer to 70 personnel laid off recently, and even more over the past couple of months.
EKWB: As mentioned, the 25% reduction happened as a one-time measure to optimize our operations. We grew rapidly in 2020 and 2021, recording more then 30% growth year to year. There was of course some fluctuation during this period, in 2021 4% to be exact. Which is really low compared to benchmarks in our industry. To put things a bit more into perspective: EK took part in Gallup poll of employee engagement survey in 2021 and we are in 6th percentile on a global level (only 6% of companies globally have more engaged employees than EK). We were and still are striving for best working environment. Shortly, EK was and still is one of the best places in the world to have career.
TechPowerUp: What would you say to those who will ask why not cut down on marketing events such as booths at PAX East etc?
EKWB: We had to adjust company to demand while structure company for growth. In terms of vision and strategy, nothing changed. We are dedicated to our vision of elevating computers for the better world. EK is a strong global brand and it is normal to be present in worldwide events such as PAX. Compared to larger hardware players, our presence is always more creative and we are creating significant impact with modest investments.
As said before, our presence on the global market will remain strong.
TechPowerUp: Going through LinkedIn earlier, it seems most of the people let go were R&D engineers/technology personnel. Will this affect future product plans? There don't seem to be any business/department managers let go.
EKWB: The reduction of employees was done almost proportionally in every department (with focus on future growth), R&D is our core domain and most of outstanding innovations are coming from this core, so it remains an integral part of EK.
(end of questions)
This downsizing is unlikely to threaten the company's existence, as it appears to be making business changes to stay relevant to the market. For starters, despite being a DIY water cooling components specialist, the company is making further inroads on the highly saturated pre-assembled all-in-one (AIO) coolers market, with entrenched players such as Antec, Cooler Master, Corsair, and Thermaltake all fighting for market share. It even showed off certain air-cooling solutions in recent EKWB Expo online-events, and this is on top of the enterprise and OEM business it does. Certainly change is a must as the DIY cooling consumer market is seeing several smaller brands disappear, and others having fallen prey to debt defaulting. Regardless of how you feel about this, losing jobs is never something we want to see, and we wish everyone who was laid off the best for their future endeavors.
The company is faulting these sales drops on the COVID-19 pandemic, specifically its economic impact, spike in PC hardware prices, and people spending less on premium/novelty hardware that EKWB principally specializes in—DIY liquid cooling solutions. The company also noted the impact of the war in Ukraine causing various commodity shortages for manufacturers in Europe. Matjaž Krč (CEO, EKWB) in a statement even blamed the sociological impact of COVID-19, specifically gaps between pandemic waves that enable people to travel and enjoy the outdoors—not wanting to spend on things that keep them indoors, such as gaming.
TechPowerUp spoke with EKWB and received this official statement from the company:
During the first quarter of 2022 EK, the leading computer liquid cooling solutions provider, observed signs that consumer spending was starting to decline in response to global events. Despite forecasting a reduction in demand for EU and USA during our 2021 Global Summit, the onset of conflicts in Ukraine saw sales drop below these expectations.As a follow-up, we also got responses for a few quick questions we asked the company when we first got whiff of the development:
In response to these trends which indicated moderate willingness to spend, EK is taking early precautions to streamline our operations in Slovenia. Regretfully this involved a reduction in the number of employees by approximately 25%. Further plans were also initiated that will see EK enter new geographical markets and sales channels with more outstanding and innovative products.
Now more than ever EK is committed to delivering the quality and experience our loyal customers demand. We sincerely hope our actions will permit us to do this long into the future.
TechPowerUp: What was the time period that this 25% reduction is based on? Some ex-employees are claiming closer to 70 personnel laid off recently, and even more over the past couple of months.
EKWB: As mentioned, the 25% reduction happened as a one-time measure to optimize our operations. We grew rapidly in 2020 and 2021, recording more then 30% growth year to year. There was of course some fluctuation during this period, in 2021 4% to be exact. Which is really low compared to benchmarks in our industry. To put things a bit more into perspective: EK took part in Gallup poll of employee engagement survey in 2021 and we are in 6th percentile on a global level (only 6% of companies globally have more engaged employees than EK). We were and still are striving for best working environment. Shortly, EK was and still is one of the best places in the world to have career.
TechPowerUp: What would you say to those who will ask why not cut down on marketing events such as booths at PAX East etc?
EKWB: We had to adjust company to demand while structure company for growth. In terms of vision and strategy, nothing changed. We are dedicated to our vision of elevating computers for the better world. EK is a strong global brand and it is normal to be present in worldwide events such as PAX. Compared to larger hardware players, our presence is always more creative and we are creating significant impact with modest investments.
As said before, our presence on the global market will remain strong.
TechPowerUp: Going through LinkedIn earlier, it seems most of the people let go were R&D engineers/technology personnel. Will this affect future product plans? There don't seem to be any business/department managers let go.
EKWB: The reduction of employees was done almost proportionally in every department (with focus on future growth), R&D is our core domain and most of outstanding innovations are coming from this core, so it remains an integral part of EK.
(end of questions)
This downsizing is unlikely to threaten the company's existence, as it appears to be making business changes to stay relevant to the market. For starters, despite being a DIY water cooling components specialist, the company is making further inroads on the highly saturated pre-assembled all-in-one (AIO) coolers market, with entrenched players such as Antec, Cooler Master, Corsair, and Thermaltake all fighting for market share. It even showed off certain air-cooling solutions in recent EKWB Expo online-events, and this is on top of the enterprise and OEM business it does. Certainly change is a must as the DIY cooling consumer market is seeing several smaller brands disappear, and others having fallen prey to debt defaulting. Regardless of how you feel about this, losing jobs is never something we want to see, and we wish everyone who was laid off the best for their future endeavors.
90 Comments on EKWB Lays Off 25% of Workforce, Blames Lower Watercooling Sales
Regardless or not if the person in charge was the issue, they've changed their ways, and also I don't think that's driven sales away.
I agree though, why do they only release for reference / some AIB-only designs when Barrow/Bykski are immediately ready for every model on the market?
I kind of disagree about the comparison between a waterblock and a triple slot cooler. No GPU with fans on it is remotely silent, unless you're talking about the 3070 Noctua.
Also using 3 to 4 slots is ludicrous...
Anyway they're premium / more luxury products, given what's been going on I think people are starting run out of money to be so lavish. Sure an AIO is not really that close to say a custom loop in performance, but it's -enough- for most people.
Some of it has been self afflicted - they had some serious supply issues since the pandemic started. I get they need to keep their manufacturing in Slovenia, but vs say all the Taiwan/China ODMs they'd lose out supply chain wise pretty easily.
I was talking to some distributors in Australia and they claimed that EKWB literally couldn't sell any custom watercooling stuff - it was backordered by months, as of last week. It's either they can't ship it, or have the raw materials to make it - so blaming it on COVID-19 is pretty legitimate. There's also a madman throwing missiles around fairly close by...
Also Corsair has a wider product like and can take a loss on something like this that is used by a much smaller audience anyway.
Corsair probably also creates their products in China for cheaper.
My GPU blocks are designed to work as a pair (the active backplate cannot be used with ANY other product) and yet they didnt match up the RGB lighting in any way at all - they look totally different. Oriented on opposite sides, different LED counts, and the lighting only lights half the backplate (by design!)
One LED has already died, too.
Trivial issue, but the ARGB cords come out opposite ends as well... they're a matching pair. Make the cables near each other and the same length, ffs.
And as for their coolants... 4 bottles had to go in the bin after turning into clag, and permanently marking and damaging those blocks. It's only visual damage but FFS, they need to do better.
(Yes, they sent me other coolants to replace them. No, i did not ask for replacement blocks over cosmetic issues)Not too many AIO's for GPU's out there these days
EK pricing was on weed and meta-amphetamine for at least 4 years (say end of 1xxx cards). Blocks were ridiculously expensive compared to competitors. There was 0 reasons to increase prices between 1xxx series and 2xxx GPUs from Nvidia, but they did it. EK completely f*ed up Threadripper blocks at first try. Then those stupidly expensive CPU blocks for 250 Euros, WTH will buy them if performance was worse than blocks for 100 Euros? EK simply overextended into "luxury GAMING!!! enthusiast" and skimped on broadening the range. And if they actually manufactured this in EU not in China they wouldn't have to rely on shipping across the World.
Of course because of Covid logistic went to hell with constant delays and shutdown. That surely has some bearing on this, but only some.
Metal pricing went through the roof. With Nickel recently after Russian invaded Ukraine hit like 35000$/t. China bought huge quota before invasion started so prices went like so :snap fingers: to the stratosphere. Now with Ukraine destroyed 3rd biggest nickel producer is gone. Copper went up and up for years except small dip in 2020 (~4.5k$), but now that's solid 10k$/t and climbing.
I have now only 3 EK blocks, one for 3090 and 2 for 1080Tis. They're fine, that 3090 was kind of expensive, but backplate was absolutely required, because aircooled 3090 just cooks itself when rendering. I like simple aesthetics, but I efing hate that you have to dismantle new blocks to take out all the RGB crap (that's not only EK problem). I always thought that liquid cooling is about functionality not RGB-puke rainbows.
Hi EK,
You know, we're not all youtubers!
Personally, I'm not going to pay 28%(345€) of the price I shelled out for an already overpriced video card(MSRP price) for waterblock and backplate.
Especially since its resale value is practically null. In my experience I know that video cards with custom loop WBs sell for less than air cooled ones.
...and it seems like I'm not the only one.
I had a full EK loop before with awesome results and 0 problems.
Yes their prices are high but quality has a price.
It's not surprising that ppl are buying less watercooling solutions since miners dont watercool and they are getting all the cards for 2 years now. It wont get better for EKWB until gpus aren't used for mining anymore
They just put a AIO in their system, mainly because it looks cleaner. A 65W CPU will even stay pretty cool with a boxed air cooler.
If people had money they would still buy custom, but inflation & exploding energy bills hitting hard. ;) Every company that sells "non essential" items will feel it, EKWB is not the first & will not be the last. When poorer folks get hit with 10% inflation, they have 10% less to spend. If they can spend less there is a company on the other end with sales loss, resulting in layoffs. And jobless folks can spend even less. Our economy is in a downwards spiral & some companies will go out of business. Period.
That's just how it is in our capitalist world. :) "It's never got any better, be happy with what you got." George Carlin
GPU water block is better than have a three fan hover in your ears :laugh:
Except when they cost 400.us for an freaking FE it's just whack
www.ekwb.com/shop/EK-IM/EK-IM-3831109833728.pdf
$200 for a rad, $120 for a block, $60 for red distilled water... hilarious.
Support zero.
The temps and sound of my PC gaming can not be matched or beaten on air, and that is why i have a custom CPU/GPU loop. Also if you have a beefy GPU, why would you want possibly 300w of heat dumping into your case relying on your case fans to get it out, when with my loop it is immediately dumped out of the case.
EK certainly need to look at their prices and quality a tad.unfortunately that is not really possible. There are generic blocks but they are usually GPU only and don't cool the ram or vrm. If all GPU's where the same it would work but they are not.