SpaceX layoff hundreds of staff

SpaceX has admitted they’re letting go of 10% of their staff to save costs. With the Falcon Heavy rocket and the “Starship” interplanetary craft still under development, plans to build shuttles to get to the International Space Station underway, and aspirations of establishing a satellite-based internet network in the next few years, has SpaceX bitten off more than they can chew?

COO Gwynne Shotwell revealed that about 7,000 people worked for SpaceX in late 2017, which means at least 700 people have lost their jobs. SpaceX isn’t answering questions about which departments they worked for or any details about compensation. They have, however, provided the following statement about why.

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 organizations.

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.

Layoffs are typically a bad sign for a company that ideally should be expanding to take on all their new projects, but for SpaceX, the news isn’t necessarily an indicator the company is failing. Cutting off anything perceived as excess is very typical of CEO Elon Musk, who’s employed similar strategies several times before.

Uncharacteristically, Musk has avoided the topic on Twitter and has instead been focusing on yesterday’s successful Falcon 9 launch from Vandenberg Airforce Base. The first launch of the year, it’s also SpaceX’s last launch for Iridium, which could be related to the layoffs.

Over the last two years, SpaceX has completed eight launches for a total of 75 satellites for Iridium’s $3 billion NEXT constellation. NEXT satellites can provide telecommunication services and track aeroplanes across the globe, making “the world’s first, real-time, truly global view of air traffic a reality,” according to Don Thoma, CEO of Aireon who provides the tracking tech.

SpaceX’s telecommunication satellite network plan is expected to require 400 or so satellites, which could cost upwards of $15 billion if it costs as much per satellite as Iridium’s very similar network. Being optimistic, laying off hundreds of staff could potentially save SpaceX a couple hundred million dollars, which seems almost insignificant compared to the amount they’ll need in the next few years.