The Los Angeles Times points out that SpaceX is laying off 10 percent of its workforce just as the market for launching large communications satellites has slowed.
In announcing layoffs last week, SpaceX pointed to its bid for riskier markets — providing broadband internet via thousands of small satellites and building a spaceship for Mars transportation.
What went unsaid was that the company’s money-generating business of launching satellites may also face a squeeze, with new competitors on the horizon and fewer launches planned for huge commercial satellites that operate in a fixed position relative to the ground.
SpaceX cited the need to become a “leaner company” when it said Friday it would lay off 10% of its more than 6,000 employees. The cuts appear to be concentrated at its flagship Hawthorne facility, where 577 employees will be let go, according to a state Worker Adjustment and Retraining Notification Act notice dated Friday. The cuts ranged from composites and propulsion technicians and manufacturing engineers to baristas, cooks and dishwashers. SpaceX declined to say whether its facilities in Texas, Florida, Virginia, Washington and Washington, D.C., were also affected.
Orders have slowed for school bus-sized commercial geostationary satellites. Once as numerous as 20 to 25 per year, worldwide orders across the industry dropped to 17 in 2015 and 2016, according to a 2017 report from the Satellite Industry Assn. trade group. More recent industry order data aren’t publicly available, but experts say the trend toward smaller satellites for Earth imaging and communications has continued.