Close to 600 employees of SpaceX have lost or will lose their jobs over the next few days as the space transportation company founded by Elon Musk fights to stay in business as the number of rocket launches is expected to drop this year.
The total of those being let go represents close to 10% of the company’s total workforce of some 6,000 employees. Most of those to be fired work at the company’s headquarters and rocket factory located at Hawthorne, California.
Analysts say this mass firing is the first large-scale reduction of its workforce since SpaceX was founded in 2002. The company, however, has laid-off many employees before but not on this scale.
In a statement, SpaceX said its ability to continue delivering for its customers and to succeed in developing interplanetary spacecraft and a global space-based Internet means “SpaceX must become a leaner company.”
And in a sop to the employees it fired, SpaceX said it is grateful for everything they’ve accomplished and their commitment to SpaceX’s mission. SpaceX said the employee firings were the result of the extraordinarily difficult challenges ahead and would not otherwise be necessary.
In late 2018, SpaceX President and CEO Gwynne Shotwell warned there might be a slowdown in the number of satellites to be launched by firms in the geo-telecommunications industry. These commercial launches are the lifeblood of SpaceX.
SpaceX says it costs more than $60 million to launch a Falcon 9 rocket on a commercial mission such as deploying a telecommunications satellite to Low Earth Orbit (LEO). On the other hand, it will cost a client some $90 million to use the more powerful Falcon Heavy rocket.
“Next year (2019) you won’t see as many launches as you see in 2018,” said Shotwell. “2019 is a lower-cadence year.”
Ironically, Space X had its best year in 2018. It successfully launched 21 missions, giving it the U.S. record for the most number of launches in a year.
It’s always unfortunate when there are large layoffs, noted Jan Vogel, executive director of the South Bay Workforce Investment Board.
He said the board is in touch with SpaceX and is ready to provide transitional services to employees that have been let go. We’re ready to help people, said Vogel.