SpaceX to Lay Off 10 Percent of Employees

Elon Musk (Credit: SpaceX)

The Los Angeles Times reports that SpaceX will lay off 10 percent of its roughly 6,000 employees in an effort to become leaner.

“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,” the Hawthorne-based company said in a statement. “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.”

Even with SpaceX’s ramp-up of satellite launches — 21 in 2018, up from 18 the year before, and on Friday the first one of this year — it has occasionally cut its workforce. Last summer, the company fired some senior managers at the company’s Redmond, Wash., office because of disagreements over the pacing of the development and testing of its Starlink satellite program.

SpaceX makes most of its money from commercial and national security satellite launches, as well as two NASA contracts, one a multibillion-dollar deal to deliver cargo to the International Space Station and the other up to $2.6 billion to develop a capsule that will deliver astronauts to the space station. The first launch of that capsule, without a crew, is planned for February.

The Elon Musk-led company has even more ambitious — and expensive — plans. Musk has said SpaceX will conduct a “hopper test” of its Mars spaceship prototype as early as next month. The production version of that spaceship and its rocket system is expected to cost billions.

Earlier this month, privately held SpaceX said it raised about $273 million in equity and other securities in an offering that sought to raise about $500 million, according to a filing with the Securities and Exchange Commission. The company is worth $31 billion, according to Equidate, which tracks private-company valuations.

  • duheagle

    So if Boeing can’t or won’t do something, it must, perforce, be impossible for any other entity to do it either – and all evidence to the contrary, no matter how blatant, will be denied or explained away.

    You are the Koolaid.

  • duheagle

    “Counsel is assuming facts not in evidence” is, I believe, the legal term of art for what you’re trying here. So now it’s the uber-devious Musk arranging to have his company’s own carefully faked-up financials “leaked” to the credulous twits as the WSJ. Say hello to Gary when you meet up with him out there in Cloud Cuckooland.

  • duheagle

    Boeing subcontracted a great deal more of Dreamliner’s total parts mass to foreign entities than it had for any previous major development project. To be fair, Boeing didn’t necessarily have a lot of choice in many cases as the narrowing of major civil aircraft producers to two – with the other being the notoriously mercantilist and quasi-governmental Airbus – has made offset extortion by typically government-owned foreign airlines an increasing problem.

    All that aside, Boeing badly flubbed the management essentials entailed by such a radically revised supply chain. Boeing simply wasn’t equipped to handle the level of detailed configuration management and subcontractor hand-holding involved in the Dreamliner project. It’s one thing to have U.S. peer companies like Northrop – which used to make 747 fuselage sections in the building which has now been SpaceX’s HQ and main factory for over a decade – make much of one’s aircraft; quite another to have foreign producers with no large-scale aerospace experience trying to do the same.

    If Boeing has a problem producing significant software systems for its aircraft on a reasonable schedule, it seems to have a lot of company in that respect among the rest of the legacy U.S. defense industrial establishment. Despite the fact that software has long since become central to every major aerospace project, the legacy majors still seem to have the attitude that it’s a peripheral matter. Accordingly, they have done next to nothing to bring their software development tools and practices up to current standards as established by companies for which software is their major product and gets the attention it deserves. Antique requirements imposed by the DoD don’t help matters.

    The founder of SpaceX, of course, won his spurs in the software business so software has been a core competency of SpaceX from the get-go instead of being the redheaded stepchild it seems to be elsewhere in aerospace.

    As for the SH-Starship TPS, SpaceX already has experience with metal TPS cooled by actively circulated fluid. The F9 Block 5 is said to use such a system – with RP-1 as the fluid – in the base of the booster.

    As for what percentage of SH-Starship’s development costs remain vs. the percentage already incurred, keep in mind that, quite unlike Boeing, SpaceX develops and makes all the engines for its vehicles in-house. Thus, the mostly completed Raptor constitutes a much higher percentage of SH-Starship’s total development costs than do airliner engines to a company like Boeing. Boeing doesn’t develop engines, it just buys them from companies that do.

    You seem to have an entirely unshakeable conviction that Boeing is the best company in aerospace, therefore it is impossible for any other entity to do things appreciably better. You are quite wrong in both beliefs.

  • duheagle

    You need to read “the textbook” more closely. A lot of companies have outsourced and off-shored to beat the band in recent decades, but the normative off-shoring – with the key, and very major, exception of China – is to have the off-shore entity be a foreign subsidiary of the company in question. Boeing, because of political pressures already noted, wound up having to off-shore a lot of Dreamliner to entirely foreign entities that had never before done aerospace work of the scale or quality required to be Dreamliner suppliers. Delays by foreign subcontractors climbing steep learning curves – and associated quality and fit problems – were behind a lot of Boeing’s travails with Dreamliner. Boeing management was bad because it was too insular and didn’t seem to really understand what it was letting itself in for when it acceded to so many offset demands.

    The recent examples of heavily vertically-integrated NewSpace companies should, I think, prompt some significant revision to conventional wisdom anent the alleged virtues of out-sourcing and/or off-shoring. Keep your eye out for new editions of “the textbook.”

  • duheagle

    The XC-99 wasn’t a technological failure, except in the sense that the B-36, on which it was largely based, was insufficiently a product of its own future as opposed to the past. The XC-99 was a financial failure for the same reason the Spruce Goose was – because DoD declined to purchase any. But its failure was in being too conventional, not too pathbreaking. The same is pretty much true of the A-380. It’s a conventional airliner in everything but size. Even its size is only a modest increment over that of the decades-in-service 747.

    SH-Starship, whatever else one may care to say about it, is as big or bigger a leap anent rockets as the Dash-80 and 747 were anent airliners in their day. And SpaceX already has its Juan Trippe. His name is Maezawa.

  • duheagle

    Maezawa.

  • duheagle

    Bloomberg has had some serious credibility problems anent its reportage recently. This may be more of the same.

    I don’t know why Bloomberg refers to “investors,” for example, when SpaceX’s recent resort to the capital markets was for loans, not equity investment.

    As for its profitability, SpaceX has always chosen to book very modest profits and push capex and R&D as hard as possible. This is not a formula much admired on Wall Street these days.

  • Andrew Tubbiolo

    Oh gosh, I wonder why they did not check with you?

  • Andrew Tubbiolo

    You know, I thought private enterprise was supposed to be inherently superior at solving these kinds of problems. Why are these kinds of malfunctions happening in a non governmental program? Surely, the 787 was as close to a libertarians dream as you’re going to get at that scale. I wonder why the system failed to self correct?

  • Robert G. Oler

    The XC-99 wasn’t a technological failure, except in the sense that the
    B-36, on which it was largely based, was insufficiently a product of its
    own future as opposed to the past.

    it was a failure …no one but the US military could afford the engine operating cost and failure rate

    and no Maexawa is not Trippe…but thanks for trying

  • Robert G. Oler

    they are not making a profit its that simple

  • Robert G. Oler

    they loaned them money

  • Robert G. Oler

    yeah they are running out of money some people had to be emailed out 🙂

  • MzUnGu

    It could be profitable, but if the man wants to burn it on a spaceship with no payload then it’s a hole that no amount profit can fill. With the coming slowdown of the number of Geo Sats, the company is going to an very iffy place with no savings.

  • Paul_Scutts

    “Here we go again” – Right back at you, Richard.

    SpaceX “back of the napkin” financial position;

    Income (over life of operation); 65 launches @ an average of 65 million per launch, equals 4.3 billion dollars.

    Expenses;
    Wages (over life of operation) Average of 3,500 staff over 7 years of operation, with an average real cost (wages/benefits/taxes/ancillary support costs) to company of $75K per person, per year, equals 1.8 billion dollars.
    Launch Variable Costs (Materials/Fuel/Approvals etc.);
    50 @ 25 million per launch, 15 @ 15 million per launch (reused boosters), equals 1.5 billion dollars.
    Plant & Equipment; (Property/Offices/Launch Sites/Land & Water Vehicles etc.); 0.2 billion dollars.
    Total Expenses (so far); 3.5 billion dollars.

    Income less Expenses (so far) equals 0.8 billion dollars.

    Then factor in, loan interest repayments, additional costs associated with FH/Dragon II/Satellite/Rocket Engines/BFR development etc. etc. etc.).

    SpaceX stock market value of 30 billion dollars, bahahah (as he remembers those of Fannie and Freddie pre 2008).

    Regards, Paul.

  • Robert G. Oler

    those are your words not mine

  • Robert G. Oler

    you probably need more…because since you you are reusing things you have to keep track of that parts count