SpaceX says it’s reducing its workforce by about 10 percent as part of a strategic realignment to focus the California-based company on providings its global Starlink satellite broadband service and furthering CEO Elon Musk’s drive to make humanity a multiplanet species.
Word of the reductions came just hours after SpaceX executed its first Falcon 9 rocket launch of the year, putting 10 Iridium NEXT satellites into low Earth orbit, and a day after Musk hailed the assembly of a subscale test prototype for SpaceX’s interplanetary Starship spacecraft.
Assuming that the company currently employs more than 6,000 people, a 10 percent cut would amount to 600 jobs.
SpaceX says its financial condition remains strong and that it’s retaining investor confidence. In documents filed with the Securities and Exchange Commission this month, the privately held company reported raising $273.2 million from eight investors as part of a $500 million Series J financing round. Analysts estimate SpaceX’s value at more than $30 billion.
Founded in 2002, SpaceX has racked up a string of launch successes, punctuated by only a few failures over the past 16 years. Highlights include its multibillion-dollar contracts to resupply the International Space Station and develop a space taxi for NASA astronauts, plus last year’s maiden launch of its Falcon Heavy rocket.
Over the past year, the company has signaled that it will focus increasingly on its Starlink satellite venture as well as the development of a massive Starship spacecraft and Super Heavy rocket booster.
Today SpaceX informed employees that cutbacks were coming, and issued a statement explaining the realignment:
“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.”
The Starlink project will involve deploying as many as 12,000 satellites into low Earth orbit to provide global broadband coverage. SpaceX has hinted that the satellite venture is key to its long-term financial future. During a Seattle visit in 2015, Musk said revenue from the venture would eventually fund construction of a city on Mars. And last year, SpaceX President Gwynne Shotwell noted that the satellite industry was significantly more lucrative than the launch industry.
SpaceX’s development facility in Redmond, Wash., is playing a key role in making Starlink possible, and went through a management shakeup last year with the aim of accelerating progress on that front. Two prototype satellites were sent into orbit last year, and SpaceX plans to deploy its first set of operational satellites this year.
The company’s Starship spaceship and Super Heavy booster could eventually play a key role in putting all those satellites in orbit. SpaceX says the next-generation launch system should also enable point-to-point intercontinental travel, trips around the moon and to the lunar surface, plus passenger flights to Mars and other solar system destinations.
SpaceX’s Starship prototype, known as the Starship Hopper, was assembled at the company’s test site in South Texas over the span of the past few weeks. Musk says short-hop launch and landing tests could begin in February or March. Japanese billionaire Yusaku Maezawa has already signed up for a round-the-moon trip on the Starship in the 2023 time frame. The price for the trip has not been disclosed.
In the past, Musk has said trips to Mars could start by the mid-2020s.
