WASHINGTON — Virgin Galactic said it will lay off employees and cut expenses to preserve resources for the next generation of suborbital spaceplanes.
In a statement dated November 7, Virgin Galactic announced a “strategic reorganization of corporate resources and related workforce reduction” to allow the company to focus on developing the Delta class of vehicles that the company has pinned on its future hopes.
The company did not provide details, including the number of people laid off, saying it was still in the process of notifying individual employees individually and that it would provide more information in a previously scheduled earnings call on November 8.
The company’s facilities will be closed during the rest of this week. Virgin Galactic reported it had 1,166 employees through the end of 2022 in an annual report filed with the Securities and Exchange Commission in February.
in Memo to employeesVirgin Galactic CEO Michael Colglazier said the layoffs and other expense cuts are aimed at keeping the company funded so it can focus on developing Delta vehicles, which are intended to fly more frequently and at a lower cost than their counterparts. SpaceShipTwo’s current suborbital vehicle, VSS Unity.
He also cited “uncertainty” in markets due to rising interest rates and geopolitical events. This uncertainty “makes access to capital in the near term much less favorable,” he said.
“Delta ships are powerful economic engines,” he wrote. “To bring them into service, we need to expand our strong financial position and reduce our reliance on unpredictable capital markets. We will achieve that, but it requires us to redirect our resources toward Delta ships while streamlining and reducing our work outside the Delta program.”
The company reported $980 million of cash and cash equivalents on hand at the end of the second quarter of this year, when it reported a net loss of $134.4 million. The company did not disclose its estimated costs for developing the Delta vehicles, but said it expects these vehicles to enter service in 2026. The company expects only limited revenue from the VSS Unity, which is able to fly monthly and carry up to four customers at a low price. time.
Virgin Galactic has previously taken other steps to cut costs. The company said in May that it would postpone for about a year work on a new line of motherplanes that would carry Delta-class spaceplanes aloft, concluding that the plane it currently uses for VSS Unity flights, VMS Eve, could also be used for spaceflight. Test flights of Delta class vehicles. The company also abandoned plans to bring another spaceplane, the VSS Imagine, into service before introducing its line of Delta vehicles.
In the memo, Colglazier did not mention the impact the layoffs might have on VSS Unity’s operations. Virgin Galactic completed Galactic 05, its fifth commercial flight, on November 2, with two researchers and a private astronaut on board. It was the vehicle’s last scheduled flight of the year, as it and VMS Eve entered an annual maintenance period. The company said after Galactic 05 that flights will resume in January.
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