SpaceX to Lay Off 10% of Its Workers (cnn.com)

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SpaceX to Lay Off 10% of Its Workers (cnn.com)

Posted by EditorDavid on Saturday January 12, 2019 @03:34AM from the zero-hour dept.

An anonymous reader quotes CNN: SpaceX is laying off 10% of its 6,000-person workforce as it tackles two hugely expensive projects. Elon Musk's rocket company said its finances are healthy, but that it needs to make cuts so its most ambitious plans can succeed. "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 company said in a statement....

The company earns tens of millions of dollars per launch. SpaceX was recently valued at $30.5 billion after initiating a $500 million equity sale in December. The company also took on about $250 million in debt last year in its first loan sale, according to the Wall Street Journal. But SpaceX's new products are expected to cost billions to develop. In September, Musk estimated SpaceX would spend between $2 billion and $10 billion developing an ultra-powerful spaceship and rocket system, recently renamed Starship and Super Heavy.

SpaceX plans to use the technology to fly tourists to space and, potentially, one day send humans to Mars... SpaceX is also developing a constellation of satellites that could one day beam high-speed internet down to the Earth. SpaceX Chief Operating Officer Gwynne Shotwell said during a TED Talk last year that she expects the satellite constellation to cost about $10 billion to deploy. The company has already made headway on both projects.

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yawn by fluffernutter · 2019-01-12 03:38 · Score: 4, Insightful

This has become the standard way for corporations to celebrate huge success.

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1. Re:yawn by Anonymous Coward · 2019-01-12 03:52 · Score: 1
  
  My guess is he wants to cull the bottom performers and a "lay off" is the tech way to do this. He also did it at tesla.
2. Re:yawn by bobbied · 2019-01-12 04:41 · Score: 4, Insightful
  
  SpaceX is not hugely successful though. They just failed their capital raise and are in pretty bad shape. Companies experiencing growth do not have mass layoffs.
  10% is a mass layoff? I worked for a company that routinely laid off 10% every year. If you where in the lower 10% of performers you got walking papers right after the 1 Quarter each year. They where growing at the time too. Thankfully I don't work there anymore...
  I'm not saying this is a good idea, only that your statement is not necessarily true. Some companies do layoff when growing. It's a management technique that used to be a bit more popular than it is today.
  To the question about why SpaceX is doing this, I'm of the opinion (looking into from the outside) that they are trying to "right size" a bit as their growth has leveled off, reorganize things a bit for efficiency. But, I don't really know for sure.
  
  --
  "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
3. Re:yawn by fluffernutter · 2019-01-12 05:00 · Score: 1
  
  If he's trying to "scare" the 90% by getting rid of the lowest performing 10% then yeah, absolutely he is.
  
  --
  Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
4. Re:yawn by bill_mcgonigle · 2019-01-12 07:08 · Score: 1
  
  No doubt? This is the guy who slept 3 hrs a day for weeks on the factory floor because he wouldn't ask anybody to work more hours than him. He says doing so saved Tesla from closing six months ago, potentially unemploying thousands.
  Where does your certainty come from? I usually find his employees speaking fondly of him. What do you know differently?
  
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  OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
5. Re:yawn by Rei · 2019-01-12 07:52 · Score: 1
  
  Exactly. I've been waiting for some layoffs related to production for quite some time. There's just not that much of a market yet for them to accumulate that large of a F9 fleet. And in the future they want to be switching to Starship / Super Heavy with large dispensers; Starship is designed for full, long-term reuse, unlike F9, whose upper stage is expendible, and whose first stage is designed for only a relatively limited number of reuses.
  
  --
  Hey, guys, I'm just pleased as punch to report that it's a fleet of a hundred Vogon Battle Destroyers!
6. Re:yawn by Rei · 2019-01-12 07:54 · Score: 1
  
  They just failed their capital raise
  Says who?
  
  --
  Hey, guys, I'm just pleased as punch to report that it's a fleet of a hundred Vogon Battle Destroyers!
7. Re:yawn by ShanghaiBill · 2019-01-12 08:14 · Score: 1
  
  My guess is he wants to cull the bottom performers and a "lay off" is the tech way to do this.
  If he just wanted to trim deadwood, there would be no need for a big public announcement that damages employee morale and raises questions about he company's future.
  The only reason for this to be done publicly is to make a show for wavering investors.
8. Re:yawn by slashdice · 2019-01-12 08:16 · Score: 1
  
  According to insiders, he spent much of that time deep dicking Grimes.
  
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9. Re:yawn by Hognoxious · 2019-01-12 09:55 · Score: 1
  
  Exactly. I've been waiting for some layoffs related to production for quite some time.
  Perhaps it would be better if they'd shed the shills.
  
  --
  Confucius say, "Find worm in apple - bad. Find half a worm - worse."
10. Re:yawn by LynnwoodRooster · 2019-01-12 14:13 · Score: 1, Interesting
  
  Or maybe they are cutting their biggest controllable expense, since they are losing billions of dollars...
  
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11. Re:yawn by LynnwoodRooster · 2019-01-12 14:16 · Score: 2
  
  SpaceX is not hugely successful though. They just failed their capital raise and are in pretty bad shape. Companies experiencing growth do not have mass layoffs.
  10% is a mass layoff?
  Yes, it is. This meets the legal requirement to be deemed a mass layoff. More than 500 people is a mass layoff, and brings with it specific legal requirements for the company - which includes announcing said mass layoff publicly, and at least 60 days prior to the layoff.
  
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12. Re: yawn by LynnwoodRooster · 2019-01-12 14:17 · Score: 3, Interesting
  
  It is when that 10% is more than 500 people. This layoff meets the legal definition of a mass layoff, and has specific actions the company must take related to the mass layoff.
  
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13. Re:yawn by lgw · 2019-01-13 03:10 · Score: 1
  
  This is the guy who slept 3 hrs a day for weeks on the factory floor because he wouldn't ask anybody to work more hours than him.
  
  I can't imagine a worse boss. Being an insane workaholic yourself is not an excuse for demanding the same from your employees - worse, the workaholic thinks it's OK, which is far worse than the guy who knows he's abusing his people.
  
  --
  Socialism: a lie told by totalitarians and believed by fools.
14. Re:yawn by Rei · 2019-01-13 03:43 · Score: 1
  
  I'll repeat: says who?
  Look, I know it's never fun to get called out on BS, but it's happening. You're being called out to source your claim. Do so.
  
  --
  Hey, guys, I'm just pleased as punch to report that it's a fleet of a hundred Vogon Battle Destroyers!
15. Re:yawn by theskipper · 2019-01-13 04:27 · Score: 2
  
  Oy. Here, I'll do the homework for both of you:
  Total Offering Amount $499,999,992 USD
  Total Amount Sold $273,199,776 USD
  Total Remaining to be Sold $226,800,216 USD
  Source: https://www.sec.gov/Archives/e...
  They were only able to raise about half of what they needed so far. Either they didn't wait until it closed at the full amount because they needed the currently raised money asap and then hoped more would come. Or less ominously, there simply was no more interest in the offering and decided to wrap it up.
  Now that the logjam has been cleared, you may now both proceed with your spin.
16. Re:yawn by bobbied · 2019-01-14 02:54 · Score: 1
  
  Then I've gone though countless numbers of "mass layoffs" with the companies I used to work for. I must be battle weary with PTSD or something. I worked for the "We lay off 10% every year" company for 3 years during the late 90's and it was growing by leaps and bounds, then worked for a two bit telcom company for 12, riding the 2000 down turn where the company went from 2,000 employees down to 550, up to 1,200 and back down to 550. We saw MASS layoffs there.
  The argument I'm making is that "10% + layoffs DO happen in growing companies" more often than the OP might think. I really don't care if you want to call it a "mass layoff" or a simple "reduction in force", and really, to the folks getting their walking papers and to those left to pick up the pieces it doesn't matter.
  
  --
  "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Brutal by timeOday · 2019-01-12 03:47 · Score: 5, Insightful

I can't get used to successful companies doing big layoffs just to rebalance for the current workload. I guess it is rational given the assumption that plenty of well-qualified people will always be looking for work - although I'm surprised this is the case here - but beside that if there is no weight given to continuity for employees it just seems impossible to have a stable career + marriage + life.
1. Re:Brutal by Hentes · 2019-01-12 04:13 · Score: 4, Insightful
  
  Succesful doesn't always mean profitable. SpaceX is struggling to stay afloat, and a way to make it more profitable could be to halt new development (and let go of the R&D staff) and start mass producing the design they already have. Always developing new stuff means you have to constantly redesign your production facilities, increasing cost.
2. Re:Brutal by Anonymous Coward · 2019-01-12 04:37 · Score: 1
  
  Succesful doesn't always mean profitable. SpaceX is struggling to stay afloat, and a way to make it more profitable could be to halt new development (and let go of the R&D staff) and start mass producing the design they already have. Always developing new stuff means you have to constantly redesign your production facilities, increasing cost.
  wow, you just totally ignored the entire point of what you are responding to. So you don't place ANY value on human life either.
3. Re:Brutal by Anubis+IV · 2019-01-12 04:38 · Score: 3, Interesting
  
  ...although I'm surprised this is the case here....
  You're not well acquainted with the aerospace industry, are you.
  I did three internships in the space industry. For two of those summers the guys I was working with had been on that exact same project for at least 20 years. They said the project had changed hands through six companies and about half as many managers, but the project trudged on and the jobs persisted, with no end in sight. By the time of my third internship, those contracts had changed hands again and I ended up working with a different group...which had likewise already lasted through at least a few changes of corporate overlords, though admittedly not as many as that first group.
4. Re:Brutal by Anonymous Coward · 2019-01-12 04:38 · Score: 1
  
  To a large company you are just a number...no you're not even that; you're an expense. An expense they can easily do without by making others work harder to cover the lost numbers out of fear for their jobs.
  As somebody who survived the recent GE 'restructuring', the team i'm in has lost 20% of it's members with no reduction in workload meaning we are constantly buried and fighting at every step simply to keep our heads above water. This is exactly how companies want it; we kill ourselves with stress so they keep their massive paychecks.
  Losing your car, your marriage, your home or even your life doesn't mean squat to them.
5. Re:Brutal by alvinrod · 2019-01-12 04:45 · Score: 2
  
  You’d rather they keep employees around that they can’t utilize effectively and maybe bankrupt the entire business as a result? SpaceX may be somewhat unique in that it’s part of a new and relatively small industry, but most of the time that companies shed workers there isn’t too much difficulty in finding work at another company in the same industry. Unless the industry as a whole is in a downturn, one company doing badly likely means that another is growing.
6. Re:Brutal by Anonymous Coward · 2019-01-12 04:51 · Score: 4, Insightful
  
  no weight given to continuity for employees it just seems impossible to have a stable career + marriage + life
  Welcome to the future. There are many reasons for reduced birth-rates and effectively falling populations (if immigration is stripped out) in the western world. And one of them is that it is becoming increasingly impossible to actually have a long-term partner, start a family and raise kids, when both adults are on short-term contracts, can and will be layed-off regularly, and/or have to move city, retrain, or be furloughed at a moment's notice. "just get a new job" is the refrain - but that is easy to say when you yourself don't need to do that, or ensure that there is continuity in child rearing, education, feeding and providing.
  Temporary contracts, temporary accommodation, temporary lives.
  The rich don't care - they don't have any of those worries. The technotopia they are trying to build is specifically designed to ensure there is no role for "ordinary people" in the world, so I'm sure they don't care. The rest of us? ......
7. Re:Brutal by Anonymous Coward · 2019-01-12 04:53 · Score: 5, Insightful
  
  You’d rather they keep employees around that they can’t utilize effectively and maybe bankrupt the entire business as a result? SpaceX may be somewhat unique in that it’s part of a new and relatively small industry, but most of the time that companies shed workers there isn’t too much difficulty in finding work at another company in the same industry. Unless the industry as a whole is in a downturn, one company doing badly likely means that another is growing.
  I'd rather they recognized humans as valuable assets and treat them as such, and apparently you have no problems telling other people that they be permanent technology refugees to satisfy your consumer desires.
8. Re:Brutal by m00sh · 2019-01-12 05:11 · Score: 2
  
  I can't get used to successful companies doing big layoffs just to rebalance for the current workload. I guess it is rational given the assumption that plenty of well-qualified people will always be looking for work - although I'm surprised this is the case here - but beside that if there is no weight given to continuity for employees it just seems impossible to have a stable career + marriage + life.
  Assumption is that when you want a "stable career + marriage + life", you will work somewhere else.
  SpaceX etc are companies that you make your career out of. You work there first in your 20s and early 30s and then, you work somewhere else and find a stable, low-stress job.
9. Re:Brutal by sphealey · 2019-01-12 05:18 · Score: 3, Interesting
  
  Most people I know who went to SpaceX planned to work there 5 years + 1 day to ensure they were vested in their options. If those options are starting to look shaky that could be a bit of a problem for employee retention.
10. Re:Brutal by Bite+The+Pillow · 2019-01-12 05:24 · Score: 3, Insightful
  
  It's only 10% - they are cutting the dead weight, with a valid layoff reason, not just arbitrary firing.
  90% survives. I'd take that wager.
11. Re:Brutal by jeti · 2019-01-12 05:30 · Score: 4, Insightful
  
  SpaceX isn't struggling to stay afloat. They have a very profitable launch business. However, they're struggling to finance the development of the new Starship with its Ultraheavy booster and the Starlink system, which will consist of several thousand satellites, all at once.
12. Re:Brutal by bill_mcgonigle · 2019-01-12 07:03 · Score: 1
  
  The idea of "a career" was always a lie, though a few people managed to eek one out - most have not. When I was a kid, many of my friends' dads had "careers" at IBM and Bell Labs and then came the 80's. Most of them felt betrayed and their lives were turned upside down, because they bought into the career mythos. One wound up selling lawnmowers at Sears because he had been near retirement and almost lost the house.
  Anyway, SpaceX just raised two huge rounds of financing and these cuts were almost certainly a condition of this kind of funding if the investors saw fat. I would bet they asked for 25%.
  
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13. Re:Brutal by aaarrrgggh · 2019-01-12 07:16 · Score: 1
  
  It sucks to be on the employee side, but sometimes it is the best solution to get a healthy churn.
  Most of the SpaceX people I see are younger, and might need a little push to broaden their horizons, especially towards the lower end. I imagine, from what I do understand of their culture, they want more people fresh from college.
14. Re:Brutal by Goldsmith · 2019-01-12 07:33 · Score: 1
  
  This is the reality we live in. It's not just big companies, it's governments, universities... just about every organization. I started my own company to break out of this, but after filtering through several layers of professional investors, you always have to deal with the root investors. Their focus is only on the return, and "they" are everyone (the mob, the masses, the average person).
  In the end, it's the relatively new requirement that a narrow definition of fiduciary responsibility to the investors is the primary responsibility of a company that drives shitty behavior. This is overwhelming in the pubic markets, and you're seeing it pop up even in non-profits, but it is not likely a sustainable economic philosophy as it prioritizes short term profits over long term growth.
15. Re:Brutal by tomhath · 2019-01-12 07:38 · Score: 1
  
  They have a very profitable launch business.
  Not really. They show an operating profit with successful launches - but that doesn't mean anything because it ignores depreciation and capital investment (e.g. the R&D you listed).
16. Re:Brutal by phantomfive · 2019-01-12 07:43 · Score: 1
  
  but beside that if there is no weight given to continuity for employees it just seems impossible to have a stable career + marriage + life.
  In the software industry, stability comes from the skill of being able to find a job quickly. Trying to get stability any other way is a fool's game.
  
  --
  "First they came for the slanderers and i said nothing."
17. Re:Brutal by Kjella · 2019-01-12 07:48 · Score: 1
  
  SpaceX isn't struggling to stay afloat. They have a very profitable launch business. However, they're struggling to finance the development of the new Starship with its Ultraheavy booster and the Starlink system, which will consist of several thousand satellites, all at once.
  Not that big a profit relative to their plans... I mean they got 21 launches in 2018, the F9 is at â62 million list price and the FH at $90. If we assume with services and all and the Dragon it's a $100 million average that's $2.1 billion gross. Even with profits of hundreds of millions of dollars both those projects are multi-billion dollar investments. And they kinda go hand in hand, Starlink needs cheap launch of thousands of satellites and there's no real market for BFR's capacity without Starlink. There's what, two FH launches planned for next year? Not much needs that kind of payload capacity.
  
  --
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18. Re: Brutal by q_e_t · 2019-01-12 12:05 · Score: 1
  
  Most people who save, don't buy expensive toys, don't live in a mansion and drive a cheap guitar could not hope to save enough to avoid the need to work for several years.
19. Re:Brutal by Guspaz · 2019-01-12 18:04 · Score: 1
  
  There is the possibility of SpaceX getting some of the launches for NASA that SLS would have done. There is also a possibility that they might get some business with BFR that FH was too expensive for, since BFR is supposed to be fully re-usable on both stages (not to mention the fact that SpaceX has yet to recover an FH core stage). They may also have been able to combine other multi-satellite launches: if memory serves, they've done eight launches for Iridium so far, for example.
  If anything, I think there's a bigger market for BFR than for FH. It should be, in the end, both cheaper and simpler than FH. It makes me wonder why they didn't cancel FH ages ago and put the resources into BFR instead.
20. Re:Brutal by NormalVisual · 2019-01-12 22:57 · Score: 1
  
  Can't pay people to stand around and wait.
  Actually, sometimes that's exactly what you need to do. A problem that I've often encountered is that someone is let go because there's not a current project to put them on, but that person has years of institutional knowledge that would be valuable on future projects. It's silly to let a valuable employee go because they're temporarily idle for a couple of months, when it takes years for new people to relearn what that person already knew, with the attendant expensive failures along with the way due to the new folks not knowing that a given course of action has been tried before and failed. It's particularly true in the defense-related industries, when the employee has a security clearance - not only do you lose that knowledge, you end up spending tens of thousands of dollars to get a new employee cleared, while they have to wait a year or more or so for their clearance to be processed before they can start contributing to the effort they were hired for.
  
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21. Re:Brutal by strikethree · 2019-01-14 05:05 · Score: 1
  
  So would this be one of the situations where the word "decimate" actually means what the word itself means? ;)
  
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22. Re: Brutal by mfgFactor · 2019-01-15 11:05 · Score: 1
  
  It takes reading a book to realize that companies are striving to not hold onto employees long term? Hell they had to change the laws in washington to make it so Microsoft would stop cycling contract engineers in and out constantly.
Re: But but but by Anonymous Coward · 2019-01-12 03:55 · Score: 1

Of course, but not all of it. Sacrifices have to be made.
Wow! by Anonymous Coward · 2019-01-12 05:12 · Score: 1

California can't even build a train across a flat valley for $25 billion.
SpaceX puts a constellation of advance satellites into orbit for $10 billion,,
1. Re:Wow! by Miamicanes · 2019-01-12 07:28 · Score: 1
  
  > California can't even build a train across a flat valley for $25 billion.
  The expensive part isn't the flat valley. The EXPENSIVE part is the bored tunnels to get the trains to and from the big cities on the OTHER SIDE of the mountains surrounding that flat valley, and the first and last hundred miles or so of track at both ends. Most of Phase I's cost is actually for the hundred miles or so of track between San Jose and the Modesto area that will be used by CalHSR, but ALSO used for high-speed commuter rail (so people who work in the Bay Area will be able to live in more affordable areas and still have a semi-sane commute).
Re:Math is tough. by wolfheart111 · 2019-01-12 05:21 · Score: 1

especially when your job is to get the wrong answer :)

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[($)]
Due to carbon fiber to stainless swap? by Dereck1701 · 2019-01-12 05:23 · Score: 5, Interesting

I wonder if this has to do with their big changes to the "Starship" from a carbon fiber/PICA-X design to an actively cooled stainless steel design. Shedding one focused workforce (carbon fiber) so they can eventually rehire another (metal work). It is also (for better or worse) a pretty standard procedure in competitive industries to "cull the heard" as it were once in a while to keep the company from getting too complacent. It stinks for those being cut no doubt, but it's better than ending up like the behemoths they're competing against who are still using 1970-80s tech and burning up insane amounts of money on their way to obscurity.
1. Re:Due to carbon fiber to stainless swap? by Anonymous Coward · 2019-01-12 05:42 · Score: 1
  
  I guess they are cutting the slackers who only work 60 hours a week vs. the expected 70-80 hours a week...
2. Re:Due to carbon fiber to stainless swap? by yes-but-no · 2019-01-12 18:29 · Score: 1
  
  No one put a gun on head and asked to do slave labor. Modern day slavery is mind control (matrix movie; I need that fancy house/car, need to show i'm bigger/better than that guy). Musk does because he doesn't do slave labor. He follows his passion. No reason why a rank-n-file can't follow his/her passion. Yeah be willing to live like a beggar/homeless - no one stops you. Freedom always asks the highest price. If you can say 'no', you can be free.
3. Re:Due to carbon fiber to stainless swap? by DerekLyons · 2019-01-14 10:05 · Score: 1
  
  Nah. It's probably on the Falcon and Merlin production side of the house - the shift to reuseability means they don't need to produce as many of either.
New Startup: SpaceY? by jfdavis668 · 2019-01-12 06:54 · Score: 1

The downsized employees will start their own new company called SpaceY?
1. Re:New Startup: SpaceY? by NormalVisual · 2019-01-12 23:04 · Score: 1
  
  Or just SpaceEx.
  
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2. Re:New Startup: SpaceY? by NormalVisual · 2019-01-12 23:05 · Score: 1
  
  Replying to myself - yes, I know the company's name is Space Exploration Technologies.
  
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3. Re:New Startup: SpaceY? by samwichse · 2019-01-16 04:21 · Score: 1
  
  SpaceX++
Problem with reusable spacecraft by jfdavis668 · 2019-01-12 06:57 · Score: 1

When your launchers can be reused 10 times, you don't need to continuously build them. Sooner or later you have enough.
1. Re:Problem with reusable spacecraft by apoc.famine · 2019-01-12 11:51 · Score: 4, Insightful
  
  This was my thought as well. It takes a lot of manpower to design and manufacture rockets. It takes a lot of manpower to design and implement a rocket retrieval process. It takes a lot of manpower to design and implement an inspection and refurb process for reused rockets. It takes manpower to learn from the fuckups doing all of this and reconfigure what you're doing to address it.
  At this point, SpaceX is past all of that design and implementation work. They seem to be at a fairly stable place, building a few rockets a year, and launching, landing, and refurbing a whole bunch more.
  I really am not surprised that they need to reconfigure for 2019, especially given their change in focus. I bet a lot of the employees that they just let go aren't that surprised either. It's one thing when your company does arbitrary layoffs. It's a different thing when you can see the work you're doing drying up, and you can see the company focusing on something that you're not part of.
  
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2. Re:Problem with reusable spacecraft by Insanity+Defense · 2019-01-19 12:05 · Score: 1
  
  It also takes more man power when you are still learning the efficient ways to do something than it will once you have learned those ways. So if you haven't expanded enough at that point to employ all your original staff you need to cut some.
So they opted for the humane way... by ffkom · 2019-01-12 07:55 · Score: 1

... and against the initial, much more cost effective plan to invite 10% of their staff to be on their first testing flights with humans on board. Phew!
That's the way it is by nospam007 · 2019-01-12 10:34 · Score: 1

They didn't get a govt contract and so they lose 10% of their workforce and the taxpayer pays 500% more for rockets.
Not to mention, you know, cocks and all that by Hognoxious · 2019-01-12 10:45 · Score: 1

The technotopia they are trying to build is specifically designed to ensure there is no role for "ordinary people" in the world
Rubbish! Their lawns will need mowing, their houses will need cleaning, their brats' snotty noses will need wiping.

--
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
/.'s resident Musk-denier, right on cue. by Brannon · 2019-01-12 16:18 · Score: 1

Tells us again how the rocket landings were faked.