Misfire: Elon Musk’s SpaceX Is Laying Off Ten Percent of Staff

According to a recent report, Elon Musk’s space exploration firm SpaceX is laying off about ten percent of the company’s staff, saying in a statement that SpaceX “must become a leaner company.”

TechCrunch reports that Elon Musk’s space exploration firm SpaceX plans to cut ten percent of its current workforce in order to manage costs. The company said in a statement that the sudden layoffs are in an attempt to become a “leaner company” and that they only needed to be done due to “the extraordinarily difficult challenges ahead.”

The full statement from SpaceX reads:

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.

According to the most recent estimate of SpaceX’s workforce, which according to COO Gwynne Shotwell was 7,000 employees in 2017, this would mean that approximately 700 SpaceX employees will be let go. It is unknown at this time which areas of the company will lose staff.

SpaceX’s explanation of wanting to become a “leaner company” doesn’t make much sense given the size and youth of the company, the firm hasn’t really been around long enough to have gained a number of mid-level employees, and given the lucrative government contracts that the firm has benefited from, their Falcon 9 rocket should be generating enough income to keep them operating for some time.

Recently, SpaceX unveiled their new “Starship Hopper” rocket, which was derided as looking as if it were constructed from tinfoil. Some initially believed that the rocket would feature the company’s Raptor engines at its base, which Elon Musk verified by noting that the engines currently attached to the ship are “a blend of Raptor development & operational parts.” Musk also believes that the engine will be ready to fire in the next month, but Musk also said the exact same thing in December, so whether the rocket will be fired in February is anybody’s guess.

This layoff comes shortly after SpaceX invested a large sum in one of Musk’s other projects, The Boring Company. Breitbart News reported in December:

As Elon Musk’s firm The Boring Company prepares to reveal a test tunnel in Hawthorne, California, many investors attached to another of his companies, SpaceX, are questioning the space exploration firm’s investment in The Boring Company. The California tunnel is reportedly being constructed with equipment purchased with SpaceX funds, and being assisted by SpaceX employees, something which has reportedly alarmed investors, including Peter Thiel’s Founders Fund.

As SpaceX investors looked into the arrangement between SpaceX and the Boring Company, they discovered that despite SpaceX’s diversion of resources and staff to the Boring Company, it was Musk who was likely to receive almost all future profits from the firm. Investors then began to question why money they invested in a space exploration company which promised to launch rockets and satellites was now being used to finance the construction of an underground tunnel, with the majority of profits from the project benefiting Musk due to his 90 percent equity ownership in The Boring Company.

The SpaceX board reportedly never voted on diverting funds to the Boring Company and have reportedly begun debating what to do about the situation. Since then, The Boring Company has given SpaceX approximately six percent of the company’s stock, “based on the value of land, time and other resources contributed since creation of the company,” a SpaceX spokesperson said.

SpaceX reportedly plans to launch the starship to suborbital heights to prove the viability of its systems. The company also reportedly plans to replace their current Falcon and Falcon Heavy rockets with this starship model in the near future, making the success of the hopper extremely important to the company.