Just days after Elon Musk unveiled the first images of his aerospace company’s Starship test rocket, SpaceX has announced that it is slimming down its workforce by roughly 10 per cent.
“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. Either of these developments, even when attempted separately, have bankrupted other organisations,” the company said in a statement to Gizmodo.
“This means we must part ways with some talented and hardworking members of our team. We are grateful for everything they have accomplished and their commitment to SpaceX’s mission. This action is taken only due to the extraordinarily difficult challenges ahead and would not otherwise be necessary.”
The cuts will be felt across the company, which employs roughly 6,000 people. But as the Los Angeles Times noted Friday, cuts have been intermittent at SpaceX. Musk was reportedly fired at least seven people last summer over disagreements about the performance speed of the company’s Starlink satellite program; all were reported to have been senior management staffers.
SpaceX also in 2014 laid off a significant number of workers, with two former structural technicians later suing the company over claims that SpaceX violated labour laws by failing to properly notify them beforehand.
An internal email obtained by the Times from SpaceX President and Chief Operating Officer Gwynne Shotwell about the most recent round of layoffs called the move “a very difficult but necessary decision.” Employees hit by the layoffs will be offered “a minimum of eight weeks’ pay and other benefits,” the Times said, citing Shotwell’s email to staff.
— Elon Musk (@elonmusk) January 11, 2019
The layoffs come at a pivot time for the company, which is preparing for several significant milestones in the coming year. In addition to the deployment of some of its first Starlink satellites following a demo launch last year, the company is also readying for hop tests of its Starship test-flight rocket. In a tweet last week, Musk said test flights of the prototype for a Mars-bound spacecraft would be happening in the next four to eight weeks.
Musk previously estimated that the cost of the development of the program would run the company between $3 and $14 billion. As part of its effort to fund its highly expensive programs in the coming years, the company raised an estimated $346 million in its first loan sale, the Wall Street Journal reported in November.
Despite the layoffs, SpaceX maintains that it is financially secure. As the Times noted, Shotwell told CNBC last year that SpaceX has had “many years” of profitability.