SpaceX laying off 10 percent of its workforce
Company official last year warned that there could be fewer launches
Hours after launching its first rocket of the new year last week, Elon Musk’s company told stunned employees that roughly 10 percent of SpaceX’s workforce would be laid off. Workers were sent home early to await notification to their private email addresses about their fate.
The vast majority of Space Exploration Technologies Corp.’s more than 6,000 employees work at its headquarters and rocket factory in Hawthorne, Calif., and hundreds of others are based in Texas, Seattle, Florida and Washington, D.C. Some 577 positions will be cut in Hawthorne, Jan Vogel, executive director of the South Bay Workforce Investment Board, said Sunday.
Those cut include production managers, avionics technicians, machinists, inventory specialists and propulsion technicians.
“It’s always unfortunate when there are large layoffs,” Vogel said. “We’re in touch with SpaceX, and we’re to provide transitional services to impacted employees. There are a lot of aerospace companies in the Los Angeles area. We’re ready to help people.”
SpaceX flew a record 21 missions last year for customers that include commercial satellite operators, NASA and the U.S. military. But the market size for launches is not infinite, and SpaceX President and Chief Operating Officer Gwynne Shotwell warned that there might be a slowdown in orders from the geotelecommunications industry.
“Next year, you won’t see as many launches as you see in 2018,” Shotwell said in an interview with CNBC in May. “2019 is a lower-cadence year.”
Musk founded SpaceX in 2002 to revolutionize space technology. The company, along with Boeing Co., has a contract with NASA to fly U.S. astronauts to the International Space Station on a spacecraft named Crew Dragon. Despite the ongoing government shutdown, Crew Dragon is slated to fly for the first time next month, without humans on board. SpaceX is also working on a space-based broadband satellite network and Starship, a larger spacecraft designed to carry humans to Mars.
“To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based internet, SpaceX must become a leaner company,” SpaceX said in a statement Friday. “This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.”
Musk is also CEO of electric car maker Tesla Inc., which laid off roughly 9 percent of its workforce in June. As with Tesla, some SpaceX employees who were laid off took to social media to thank Musk for the opportunity to work for him, including Justin Arredondo, a supply chain specialist.
Last week, SpaceX disclosed in a regulatory filing that it had sold $273 million in equity as part of a plan to raise a total of $500 million. The sale would boost the rocket company’s market capitalization to around $30.5 billion, the Wall Street Journal reported last month.