EKWB Lays Off 25% of Workforce, Blames Lower Watercooling Sales

[btarunr]

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:

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.

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.

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:

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.

View at TechPowerUp Main Site

 

[trespot]

Average quality, somewhat good looking products with ridiculous price tags, no need to look somewhere else EKWB you did this to yourself.
You are selling passive backplate for 45 EUR and 150 EUR for a very simple active backplate that only suckers would buy.

 

[Haile Selassie]

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

Yeah keep smoking whatever it is that you're smoking.

Tell that to e.g. ASUS, AMD or anyone else for that matter.

Perhaps your product is just not something market craves for or they're just plainly uncompetitive?

EDIT: When executives publicly brag (using some pool) how awesome their workplace is it immediately reminds me of gaslighting horror stories of the subreddit r/linkedinlunatics.

 

[dgianstefani]

Corsair has better WB for half the price, and Optimus has ones that are much much better for similar prices.

The only thing I use EK for are tubes and fittings.

 

[44722E4D616E68617474616E]

https://www.techpowerup.com/img/ZxfhvHoge26zE5OE.jpg

BOAH, just take a look at the the Chad like Absolute Unit at the far left of the image wearing the white shirt having "GOOD"..written on it. The Guy in front of him and the two at the right end of the image as well as the bottom right are huge ones too. The CEO definitely has to know what he is doing when it comes to employees like that, otherwise it could be Game Over, Klitschko Style, pretty quickly.

 

[zlobby]

Average quality, somewhat good looking products with ridiculous price tags, no need to look somewhere else EKWB you did this to yourself.
You are selling passive backplate for 45 EUR and 150 EUR for a very simple active backplate that only suckers would buy.

And don't forget what their top brass did a while ago! This will bear a stigma on the brand forever.

 

[Chrispy_]

Understandable.

When getting hold of a high-end GPU is so much harder and 2-3 more expensive than it used to be, it's also not surprising that fewer of that group are willing to invalidate the warranty by fitting a waterblock.

 

[utilizedamplitude]

And don't forget what their top brass did a while ago! This will bear a stigma on the brand forever.

What did they do?

 

[Ruru]

Average quality, somewhat good looking products with ridiculous price tags, no need to look somewhere else EKWB you did this to yourself.
You are selling passive backplate for 45 EUR and 150 EUR for a very simple active backplate that only suckers would buy.

I mostly agree, I'm more into Alphacool products. Though I have few EK products (two GPU blocks and a rad) and they're fine.

 

[bonehead123]

"Further plans were also initiated that will see EK enter new geographical markets and sales channels with more outstanding and innovative products."

So, you wanna enter new markets and make moar new stuff, but you wanna do this with way fewer employees....... good luck witdat

Well, the question TPU failed to ask, and they were certainly weren't gonna volunteer is:

How many 7-8 figure execs are you gonna let go and/or how many of them are gonna take a pay cut to help your bottom line ??????

oh do tell pleeze....

 

[Gungar]

I mostly agree, I'm more into Alphacool products. Though I have few EK products (two GPU blocks and a rad) and they're fine.

Lol Alphacool is probably the worse company in the watercool business, they are good at having a wide variety with terrible quality. Better of buying anything from chinese companies.

 

[kapone32]

Lol Alphacool is probably the worse company in the watercool business, they are good at having a wide variety with terrible quality. Better of buying anything from chinese companies.

Why do you say that?

 

[Gungar]

Why do you say that?

Because all the products i had from alphacool were badly designed or didn't last long. I never had their radiators but there is always a better option for nearly the same price.

 

[ZoneDymo]

alieexpress with companies like Barrow or so do make it hard when you ask rather insane pricing for the same thing....

 

[Leiesoldat]

EKWB could have really helped themselves by actually releasing waterblocks for graphics cards that people are buying like the AIB's for AMD. They keep on releasing blocks for cards that are not attainable rather than releasing for the most common cards sold.

 

[defaultluser]

Yeah keep smoking whatever it is that you're smoking.

Tell that to e.g. ASUS, AMD or anyone else for that matter.

Perhaps your product is just not something market craves for or they're just plainly uncompetitive?

EDIT: When executives publicly brag (using some pool) how awesome their workplace is it immediately reminds me of gaslighting horror stories of the subreddit r/linkedinlunatics.

Hey man, when you live in a resort country, making "lipstick for pigs," then you can never acknowledge seasonal downturn!


It's always someone else's fault! Diversification, what is this shit

 

[zlobby]

What did they do?

Some time ago they launched some blocks that had flaky plating and some leaks. Top management themselves (or at least some of them) claimed that it was user mistake and denied RMA.
Naturally, this sheet blew up in their faces and eventually they admitted the mistake is on their end, albeit half-assedly.

That's what I recall on the top of my head. You may google for more.

 

[utilizedamplitude]

Some time ago they launched some blocks that had flaky plating and some leaks. Top management themselves (or at least some of them) claimed that it was user mistake and denied RMA.
Naturally, this sheet blew up in their faces and eventually they admitted the mistake is on their end, albeit half-assedly.

That's what I recall on the top of my head. You may google for more.

You don't pay top dollar for treatment like that!

 

[Steamroller]

Some time ago they launched some blocks that had flaky plating and some leaks. Top management themselves (or at least some of them) claimed that it was user mistake and denied RMA.
Naturally, this sheet blew up in their faces and eventually they admitted the mistake is on their end, albeit half-assedly.

That's what I recall on the top of my head. You may google for more.

Yea dude, like 10 years ago... you cant possibly bring that topic up at this point...

 

[zlobby]

Yea dude, like 10 years ago... you cant possibly bring that topic up at this point...

And you think they have changed by now? Once a greedy hypocrite, always a greedy hypocrite. If you had the 'pleasure' of dealing with their support channels you'd know what I mean. Or maybe I am the only unlucky one?

You don't pay top dollar for treatment like that!

Yeah, they had to do massive recalls and I understand their reluctance, but many people forget that if you want sustanable business you have to uphold an impecable reputation and name for yourself. Otherwise you're quickly forgotten.
Well, some will say companies like intel and google are exveptions but let's see how it goes in the long run.

 

[ThrashZone]

Hi,
Yep way overpriced on all products really same goes for gpu's is mostly why I haven't picked up any 20 or 30 series gpu's

Even on the intel magnitude cpu blocks there's way to many parts for a overly complicated inner design and narrow minded mounting system which only fit one socket per version so they really shot themselves in the foot there
I don't mind modding a mount but how many people are willing to do that to a 300.us cpu water block

115x won't work on 2066 and neither of these will work on 1200 or even 1700 so it's all just funny seeing optimus cpu blocks will fit on all of these intel sockets but ek's won't

 

[Ruru]

Because all the products i had from alphacool were badly designed or didn't last long. I never had their radiators but there is always a better option for nearly the same price.

I've had only one dead pump which I broke myself as I let it run dry for few seconds.

 

[TheinsanegamerN]

Yea dude, like 10 years ago... you cant possibly bring that topic up at this point...

Ummm.....the same guys are STILL IN CHARGE so it is entirely relevant to bring up. Trust is hard to earn and easy to burn.

EKWB could have really helped themselves by actually releasing waterblocks for graphics cards that people are buying like the AIB's for AMD. They keep on releasing blocks for cards that are not attainable rather than releasing for the most common cards sold.

Nah we're just gonna keep releasing products for stock reference boards only. Let's raise prices, that'll fix it

Understandable.

When getting hold of a high-end GPU is so much harder and 2-3 more expensive than it used to be, it's also not surprising that fewer of that group are willing to invalidate the warranty by fitting a waterblock.

There's also cooler design to consider. Air cooling has made massive strides, and the embracing of triple slot cards gives air cards a lot more breathing room.

My 6800xt for example runs at 55c average and 72c hotspot, running a mild OC at 300w average power draw. While doing so the card is almost inaudible.

With a cooler like that who needs a waterblock

 

[Ruru]

There's also cooler design to consider. Air cooling has made massive strides, and the embracing of triple slot cards gives air cards a lot more breathing room.

My 6800xt for example runs at 55c average and 72c hotspot, running a mild OC at 300w average power draw. While doing so the card is almost inaudible.

With a cooler like that who needs a waterblock

That's a good point as most users these days doesn't have any other add-in cards than a graphics card. Probably a PCIe WLAN card and some may have a soundcard, but that's pretty much it.

 

[Chrispy_]

That's a good point as most users these days doesn't have any other add-in cards than a graphics card. Probably a PCIe WLAN card and some may have a soundcard, but that's pretty much it.

Indeed; I didn't bother buying a full cover block for my 3060Ti because it's the TUF model that's ridiculously overcooled. That thing furmarks at ~60C even on the quiet fan BIOS.