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SpaceX lays off 10% of staff by email as Falcon Heavy, BFR, and Starlink ramp up

COO and President Gwynne Shotwell and dozens of SpaceX employees were present in mid-December to show elected stakeholders SpaceX's Crew Dragon spacecraft and Falcon 9 rocket. (SpaceX)

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In an unusual move for a privately-held company that raised $500M-750M in the last six months alone and is the 2nd or 3rd most-valuable VC-backed entity in the United States (~$30B), SpaceX abruptly announced a decision to lay off ~10% of its workforce of 7,000+, effective immediately as of January 11th.

Although layoffs are often a necessary evil in particularly competitive industries or underperforming companies, SpaceX is not exactly a strong fit for either characteristic. The company also opted for a truly bizarre and impersonal layoff method so unfriendly that several employees described it feeling like a corporate “Hunger Games” or a “purge”.

https://twitter.com/seanbhart/status/1084139223760945152

Over the past six or so months, a number of reports – most recently confirmed by SEC filings showing ~$270M of $500M raised – noted that SpaceX was seeking considerable investment and capital influx in the form debt (a leveraged loan) and equity sales to the tune of $250M (loan) and $500M (equity) after some back and forth with investors and banks and additional fine-tuning. The terms of SpaceX’s 2018 fundraises are unknown but Bloomberg did acquire information suggesting that the company was only profitable or break-even with after a range of very specific and dubious accounting decisions. Put more bluntly, SpaceX did not demonstrate actionable profitability to investors during their 2018 pitches.

“[SpaceX showed] positive earnings before interest, taxes, depreciation, and amortization of around $270 million for the twelve months through September … But that’s because it included amounts that customers had prepaid and because it excluded costs related to non-core research and development. Without those adjustments, earnings for the period were negative.” – Bloomberg, 19 November 2018

However, the fact of the matter is that SpaceX’s profitability is and has long been nearly irrelevant as long as the company was still able to convince investors that it was wisely investing its funds in potentially revolutionary present and future projects like Falcon Heavy, reusable rockets, BFR, and Starlink. Essentially, if SpaceX could show that they could be profitable if they wanted to be, investors were willing to swallow unusual risks in return for prestige and a potentially vast payout down the road. The decision to lay off 10% of the company’s workforce immediately after raising anywhere from $500-750M could indicate that layoffs were either directly or indirectly related to the terms of its fundraising rounds.

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Notably, some basic back-of-the-napkin estimates would suggest that cutting 10% (say 700-800 employees) at an average salary (or equivalent hourly pay) of ~$90K/year* with an average overhead of 30% would reduce SpaceX’s operational costs by $80-100M annually, potentially enough to sway the above financial account enough to show a small annual profit or at least allow the company to break even. Put frankly, $80-100M per year is not nearly enough to plausibly fund SpaceX’s BFR and Starlink development programs at anything close to the ambitious schedules CEO Elon Musk has laid out for the company, including orbital BFR launches as early as 2020 and getting Starlink to initial operational status around the same time (2020-2021).

 

However, saving ~$100M annually might be enough to sway investors that are less prestige-hungry and more conservative to bet on a successful but still relatively high-risk launch company. To be even more generous, one could assume that ~800 employees were strategically cut to remove entire internal groups or departments no longer needed, perhaps doubling or tripling the annual savings to $200M-$300M, still not even close to enough money to fund more than 10-20% of expected BFR and Starlink capex.

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In September 2018, CEO Elon Musk estimated the new rocket would cost ~$5B to develop (no less than $2B, no more than $10B) on its own, entirely excluding the $10B COO/President Gwynne Shotwell estimated SpaceX’s Starlink satellite internet constellation would cost to complete in April 2018. Working on profits of less than $300M a year, it would take SpaceX decades of stable earnings to foot that collective $12B-20B bill.

“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.” – SpaceX, January 11

* (Source: Payscale)

At least 1 in 10 employees seen here were likely fired on Friday, January 11th. (SpaceX)

A new level of “counterintuitive”

Regardless of whether SpaceX had sincere and angelic motivations for these layoffs (it’s nearly impossible to know), the single most unpleasant aspect of the whole ordeal is how the company managed it and communicated with employees. According to comments and hints from a dozen or more employees, the process began with next to no official warning around lunchtime on Friday, January 11th. Employees attended an all-hands meeting where they were told in frank terms that a major portion of the company – those deemed to be lower performers – would be laid off within 24 hours. All 7000+ employees were told around the same time.

The catch: nobody was told who exactly would be cut – instead, SpaceX would force every single employee to leave work early on Friday and spend 12-24 hours in total uncertainty until an unspecified time on Saturday, when they were – in theory – supposed to receive an email telling them whether or not they still had a job waiting for them on Monday. In many cases, workers were forced to call a number provided by SpaceX and ask the company themselves if they still had jobs, not even receiving the absolute minimum courtesy of some sort of call or notification. Whether the given employee was five months or five years senior, the process was identical – ~24 hours of avoidable existential uncertainty followed by an automated email or phone call that you had to make yourself.

Nobody was offered a clear explanation as to why they were chosen out of all SpaceX employees. Workers who had given their heart, soul, blood, sweat, and tears to SpaceX for more than half a decade were – very literally – fired over email without the simplest explanation and told to not return to work unless returning company property, effective immediately. Thanks to California’s WARN Act protections, all laid off employees in California will thankfully be paid for two additional months (until March 11, 2019) to support job searching and re-training.

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It’s impossible to know who exactly within SpaceX thought this method of layoffs was preferable to something at least a modicum more humane. It’s equally unclear why these layoffs are happening now, and SpaceX’s official statement appears to be an unsatisfactory half-answer at best. To the 90% that remain, one can only wish them the best and hope that those 10% cut from the company were not all as essential as some of them seem to have been. In the meantime, it appears that SpaceX will continue to push ahead in attempts to improve Falcon 9 reusability, field the next Falcon Heavy, build out and launch Starlink, and develop BFR.

Some of those at SpaceX responsible for enabling the company’s many, many extraordinary achievements hopefully still remain and will be able to ensure that the company keeps heading down the right paths in spite of major speedbumps like this. If you or anyone you know knows someone who works at SpaceX or have been inspired by the company’s mission and many successes in spite of the odds, make sure to be cognizant and appreciative of the tens or hundreds of thousands of rewarded (and unrewarded) hours of hard work that go into every single major and minor SpaceX achievement. To any employees reading, thank you for your dedication and keep fighting the hard fight.

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Eric Ralph is Teslarati's senior spaceflight reporter and has been covering the industry in some capacity for almost half a decade, largely spurred in 2016 by a trip to Mexico to watch Elon Musk reveal SpaceX's plans for Mars in person. Aside from spreading interest and excitement about spaceflight far and wide, his primary goal is to cover humanity's ongoing efforts to expand beyond Earth to the Moon, Mars, and elsewhere.

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Tesla Model Y reclaims elusive sales title in competitive market

As more EVs have entered the market and some at better prices, Tesla’s Model Y has been put up against some very attractive options.

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Credit: Tesla

The Tesla Model Y reclaimed an elusive sales title in one of the most competitive markets it is in, outpacing key rivals and formidable competitors to regain the crown it once was a shoe-in for.

As more EVs have entered the market and some at better prices, Tesla’s Model Y has been put up against some very attractive options.

This is especially prudent in Europe and China, where domestic car companies have been offering attractive and cheap EVs as Tesla alternatives.

However, in September, the Model Y was able to battle back and take over the top sales spot for EVs in Europe.

In September, it had 25,938 sales, and although it was an 8.6 percent decrease compared to the same month in 2024, it was enough to be labeled the best-selling car in the European market, Automotive News reported.

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500-mile test proves why Tesla Model Y still humiliates rivals in Europe

There are four vehicles that have been atop the European EV sales rankings for any given month this year: the Renault Clio, which has three titles, the Dacia Sandero, which has won four monthly sales titles, and the Volkswagen T-Roc, which was the best-selling car in the market in August.

The Clio captured the number-two spot in September with 20,146 sales.

Despite a strong September showing for the Model Y, which was its first monthly sales crown of the year, the vehicle has not been a top-three EV in Europe this year. That is still led by the Sandero, Clio, and T-Roc.

Despite that, Tesla’s Model Y is still likely to be one of the best-selling vehicles in the world, if not the best, for the year.

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In the United States, it has dominated EV sales charts and has been one of the most popular cars in the region. The same goes for China, where the Model Y has more competition than in Europe, but is so attractive because of its premium look and feel, as well as its tech offerings.

The Model Y has been the best-selling car globally for the past two years, outpacing widely popular gas and EV models from around the world.

Tesla also just finished up its best three-month sales period in its history, delivering just shy of half a million vehicles from July to September.

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Tesla dashcam video shows crazy plane crash avoidance maneuver

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Credit: @davidbellow | X

A Tesla captured video of a crashing plane on an Oklahoma highway, as a shocking video shows a small aircraft coming across a local roadway, with various cars ducking to avoid it.

On October 23, an Oklahoma National Guard OA-1K Skyraider II turboprop plane crashed during a training mission after an engine failure. Both crew members escaped unharmed, but they were not the only ones at risk of injury.

A Tesla Dashcam video shared by a friend of the car’s owner shows the vehicle narrowly avoiding an impact with the plane, swerving left, then back onto its side of the road. It appears to be a serious miracle:

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David Bellow, the person who posted the video of the Tesla avoiding the plane, claims it was Full Self-Driving that performed the maneuver, but it is not confirmed. This is what he said:

There are a few hints that suggest it could be Tesla’s Full Self-Driving suite, but it is important to note that neither the company, the driver, nor the friend has confirmed this.

The first hint is the vehicle’s maneuver and subsequent reaction. The car suddenly swerves to the left, which any human would do, but how the vehicle continues to travel as if nothing had happened seems to solidify the idea that FSD could have been involved in avoiding the plane.

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Nevertheless, this does not confirm that FSD was in control.

My Tesla did this on FSD (Supervised) v14.1 and the internet went crazy

Most people would likely have stopped in their tracks after avoiding an aircraft while driving.

However, this is not enough proof to definitively say FSD was responsible for the avoidance.

Additionally, the “Jump to Event” button is activated in the video, suggesting that FSD was in control. The vehicle gives this option when something major has occurred, including human intervention.

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Regardless of whether the car was on FSD or was controlled manually, it is pretty crazy to have this piece of dashcam footage.

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Tesla Full Self-Driving got a minor feature that’s a massive improvement

“Brake Confirm for the Start Self-Driving button is now defaulted off. When disabled, Start Self-Driving will not require you to press and release the brake to confirm engagement.”

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Credit: Tesla

Tesla’s Full Self-Driving suite seems to get better with every single release. However, it is also making it more seamless and easier than ever to use for passenger travel, thanks to a recent feature that has flown under the radar.

Tesla started rolling out its v14 iteration of the Full Self-Driving suite a few weeks ago to Early Access Program (EAP) members, and it finally started making its way to the public for the first time earlier this week.

Tesla Full Self-Driving v14.1 first impressions: Robotaxi-like features arrive

The wide rollout of Tesla v14.1.3 was long-awaited, as its capabilities were flexed by the handful of people lucky to have it. However, those sitting with v13.2.9 were still eager to get to their hands on the new FSD version, especially considering it came with a lot of cool upgrades.

One of which is flying under the radar and not getting as much attention as it should. Although it is a minor feature change from v13, Tesla has made FSD more seamless than ever with a simple fix that it started utilizing with v14.

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With v14.1.1, Tesla started rolling out the removal of the “Brake Confirm” feature, which required drivers to touch the brake to activate Full Self-Driving. This is now an optional feature, as it now is defaulted to the off position by the car.

The release notes for the feature state:

“Brake Confirm for the Start Self-Driving button is now defaulted off. When disabled, Start Self-Driving will not require you to press and release the brake to confirm engagement.

You can enable Brake Confirm in Autopilot > Brake Confirm.”

Simply put, you no longer need to touch the brake to confirm your intention to use Full Self-Driving, which is a small but very effective fix.

It makes your car much more active in terms of overall activation, and it is definitely a quicker and more streamlined departure from your current location than ever before.

Here’s a good look at how quick it is:

@teslarati With Tesla Full Self-Driving v14, there is no delay when you start FSD. Press “Start Self-Driving” and you’re on your way #fyp #viral #tesla #teslafsd #fsdv14 ♬ original sound – TESLARATI

The feature is small, but it is very noticeable with your first uses of FSD v14. Eventually, it will become even more streamlined as Tesla solves self-driving and autonomy, as it will require zero human intervention to get started, which means the “Start Self-Driving” button will also be removed.

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