Layoffs Reported at SpaceX

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UPDATE: A Friday evening communication from SpaceX Communications Director John Taylor:

“I can tell you that there was an annual review cycle completed recently, along with some rebalancing of resources. Our resulting headcount reduction was less than 5 percent. SpaceX expects to see net positive employee growth in 2014 of approximately 20 percent.”

A reliable source reports SpaceX fired 200 to 300 people over the past week, reportedly for poor performance.

However, speculation focuses on the possibility that the company is experiencing a cash-flow crunch. The company has added thousands of employees in recent years despite a launch rate that is low compared with its main rival, United Launch Alliance.

I’ve asked SpaceX for a comment, but the company has not responded yet.

  • mfck

    I hope you get an official response. Do you know whether the source himself is among the played off?

  • Tonya

    Not surprised, but it will be interesting to see if this has any effect on the morale of the company. Most people who have worked at a startup are familiar with the moment.

    The recruiters for other companies will be hovering around right now… but it’s not the people that lost their jobs they most want to speak to.

  • BeanCounterFromDownUnder

    Yes, this often happens when things don’t move as quickly as planned. It could also be taking an opportunity to remove poor or poorer performing employees.
    Wait for the political attacks to commence. You won’t be waiting long is my prediction.
    Cheers

  • Wayne Martin

    With the numbers that have been reported you would think there would be a comment or two from some of some of the unfortunate here and there… Although maybe its a little to soon… You know what they say… Loose Lips Sink Space Ships… Well… well Pretty close anyways LOL 😉

  • Alain Nestos

    “(…)compared with its main rival, United Launch Alliance.”

    Main rival? How many commercial sats ULA has on its launch manifest?

  • Terry Stetler

    Let’s not go overboard here as we are coming up on the traditional performance review season, and in the Silicon Valley culture they often trim in chunks.

  • Zed_WEASEL

    Well one in a manner of speaking. There is one Mexican satcom.coming up. Except it is a LMart sale, not ULA.

  • Tonya

    I could name a few large well known companies that regularly use such mass culls as a standard HR practice. It’s something I personally find rather unpleasant and unprofessional.

    It excuses a lack of care in appointments in the first place, and internally companies often pass around bad employees until the next cull, rather than deal with the problem.

  • BeanCounterFromDownUnder

    Umm! What level of subsidy does ULA receive for their DOD launches (pretty much all their launches) compared to SpaceX I wonder?
    Cheers

  • Terry Rawnsley

    They fire 200 to 300 people in a week for “poor performance” and the SpaceX fanbois on this site just buy it. Sounds more to me like the top management thinks that science and engineering should conform to their ambitions. Doug has reported previously on the corporate culture there so this shouldn’t be all that surprising. Soon SpaceX will be the Walmart of its industry – good products and great prices but a lousy HR reputation.

  • windbourne

    How is it worse than what Boeing, L-Mart, or even ULA have?
    They lay off engineers and workers all the time.

    Somehow, I suspect that this has more to do with money than performance, BUT, it is not a bad thing. Many fast growing companies hire ppl that they should not. This is a way of cleaning house, ASSUMING that is what they did. Sadly, human nature is not to fire for performance but for politics.

    And as to these ppl, I suspect that most will get jobs quickly. Having SpaceX on your resume is really not a bad thing.

  • windbourne

    yeah, but I think that the majority of that 1B/year goes to support their executives as well as about 1/3 of their management.

  • windbourne

    I was thinking the same. Over at NSF, there were some supposed posters from spaceX, but hard to say that they were honestly SpaceX.

  • Terry Rawnsley

    Getting laid off is the same regardless of the company. Attempting to blame the laid off employees for the incompetence of management is what riles me.

  • windbourne

    Hmmm.
    Not sure that I see this as incompetence of employees.
    Sure, some, possibly many, that were laid off, were not well suited for start-ups position.
    I can tell you that I have known bright ppl that joined up with start-ups that I was in, that had NO BUSINESS being there.
    First they were out of their league (but still bright), and many of these were family ppl that put family first and thought that 40, maybe only 50, hour work weeks was going to cut it.
    In high-tech start-ups, a MINIMUM would be 60 hr work weeks. You can be married and have family, but they will not see you often (or you will be working in the home office).

    I will say that there is a nut job running around on the web who HATES musk. She was from HR and was fired about 6 months ago (apparently all of HR was fired). She claimed that they were doing a great job of hiring ppl, but that musk was blaming HR for issues.
    Yet, it is far more likely that she was hiring ppl that did not understand what was required of them. And from what I have seen and heard, she absolutely would not have fit into SpaceX’s environment.

  • Douglas Messier

    The numbers at SpaceX don’t add up. Too many employees, too many projects going on at once, low low launch prices, and a launch rate best described as intermittent. So I lean toward the cash flow crunch explanation. My best guess is they expanded operations too fast while the launch rate isn’t keeping up.

    I believe the reusable first stage effort is really crucial because I can’t imagine how SpaceX makes money offering these launch prices given everything it’s trying to do and the number of people on the payroll.

  • Terry Rawnsley

    I’m sure that there were some bad fits but 200 – 300? Most people will adapt their behavior to preserve their jobs and some will leave a company to preserve their families.
    I can believe that there are some bright people that have no business being with a start-up. I guess if you tell people when you interview them about the conditions and then pay them accordingly, this kind of thing will only happen rarely.

  • windbourne

    Oh, I totally think that it is possible.

    First off, 200-300 is 10% of SpaceX.
    In addition, with the fact that SpaceX fired the HR ppl some 3-6 months ago, tells me that they felt a real issue with getting the right ppl.
    Now, the real problem with HR, is that they are typically just business ppl that have absolutely ZERO idea of what a good TECHNICAL candidate would be.
    When I put out my resume, the hardest thing I have to do is get past HR. They are lazy enough that they will throw a resume for a single mistake. Seriously. You have seen my postings. I regularly abbreviate people as ppl. It is a habit from when I was on 75 baud modems (yeah, you may not even know that means). Basically, it is from LONG ago, and you learn to abbreviate certain things.
    Yet, it is a silly mistake that I have made. So, I suspect that I lost several jobs due to that.
    BUT, once I get past HR, I have ALWAYS gotten the job (except the last one that I wanted (paid 85-90/hr for full-time perl coding ), which was due to medical issues that I now suffer).

    BUT, HR can make / break companies and I would not be the least bit surprised to see that the top HR person was the wrong fit, and s?he hired the rest of the HR ppl that were even worst fits.

    and BTW, many of those ppl that applied for SpaceX jobs were doing it to get SpaceX on their resume, without knowing what they were getting into. And if these ppl were not weeded out by HR, well…..

    Finally, Musk was smart, he hired a number of engineers and CS types to work with HR to weed out the trash, and keep the good ones. There are plenty of ppl that have good technical backgrounds that KNOW how important of a job that is, and will do the right things.

    Of course, in the end, I still suspect that lack of money figures into all this. 🙂

  • Terry Stetler

    Sent out to numerous newssources,

    “There was an annual review cycle completed recently, along with some rebalancing of resources. Our resulting headcount reduction was less than 5%. SpaceX expects to see net-positive employee growth in 2014 of approximately 20%.”

    #much.ado.about.not.so.much

  • windbourne

    Odd. I personally think that getting their launch rate up to 2. / month is far more important. Likewise, dragon 2 along with FH are needed to allow Bigelow to launch his space station. With ba up there, space will likely get 1 human launch every quarter or more for the next 2-3 years.. Without these, BA can not launch.

    But agree with u that cash flow has to be part of equation.

  • SpaceTech

    What SpaceX did was a review to find the personnel that didn’t work 60 hours per week, week after week after week. Workers are told on their way in that 50hr work weeks ARE the NORM when in reality they are working 6 days per week, 10 or more hours per day.
    Everyone I know that works for SpaceX says there is NO such thing as a work/life balance. They are expected to do THIER jobs PLUS any other job that needs to be done whether it falls under their job description or not.
    Better, faster, cheaper in the long run results in high employee turnover, low worker morale and ultimately manifests itself in poor quality of product.
    SpaceX can ill afford to have any kind of launch accidents/incidents and I sure hope they learn from the experienced workers before they dumped them because enthusiasm will only take you so far.
    I would love to see the demographics of those people who were let go after performance reviews.

  • SpaceTech

    Agreed, this was probably a purging of the non-conformists. Those who don’t agree 100% with management direction and those who don’t put in the 6 days/60hrs+ per week.

  • Jeff Smith

    As someone who works at one of those big aerospace/defense companies, the numbers they quote are a fraction of what actually happened. If they say they let go of 200-300 “full time employees”, they aren’t counting the 600-1000 “contractors” they also fired (or as they would say “didn’t renew their contracts”). While SpaceX doesn’t have part time employees, but if they did, they wouldn’t count that number either.

    At my employer, when the company said they let go of “ONLY 200 full time employees”, that didn’t include about 600 contractors and 400 part time employees. It was a pretty big bloodbath.

  • Tonya

    “in the Silicon Valley culture they often trim in chunks”

    Now a few days have passed, just have a think about those words.

  • drakesfortune

    If it lowers the cost of entry into space, then it’s certainly worth it. Everyone else that’s launching to orbit costs WAY too much for it to be useful to anyone. Finally a company is doing something about that. And I guarantee you that they DID fire the under performers.

    I suppose they could go the NASA route and just make SpaceX a jobs program, instead of a space program…but I love manned spaceflight too much to want that. They shouldn’t keep the under-performers around just to please the bloggers on the internet.

    So what if cash flow was a part of the reason? It still doesn’t hurt to remove people who aren’t working effectively. Especially in a state like California where the cost to do business is just astronomical.

  • drakesfortune

    Well…good, those people not dedicated to the work being done should go. There are plenty of other people willing to put the extra work in to achieve something great. They aren’t there to collect a paycheck. They are there to accomplish things. If they aren’t as dedicated as the other 95% of the employees, then SpaceX is well within their rights to get rid of them and find 200 or 300 more people who share their values.

  • drakesfortune

    How do you know there was incompetence? You have no idea. SpaceX isn’t a jobs program like NASA. They actually want to succeed.

  • That’s not a realistic point of view.

  • He knows it is incompetence because incompetence happens on the 1 worker unit level from time to time.

    Whereas money problems cause layoffs to come in big spurts and dollops.

    Which one does this most resemble to you?

    It is a money issue no doubt. And those workers should add libel damages on top of their case because in an effort to misdirect attention from their money woes SpaceX has tarred them with the doo doo brush.

  • Uh ok but Musk given SpaceX and Telsa has shown a track record of building companies on a bet that is edgy at best. This is a money based layoff with no doubt.

  • All well and good but SpaceX did not need to malign the folks they had to let go. We all understand “ran out of money” …….but to call em dead wood and put a stink on for any future job prospects is unconscionable