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SpaceX lays off 10% of staff by email as Falcon Heavy, BFR, and Starlink ramp up
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.
When you're talking about 850 layoffs across the company, there's no way even the best company at hiring/firing decisions is going to avoid making tons of mistakes about who they kept and who they let go.
— Jonathan A. Goff (@rocketrepreneur) January 12, 2019
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).
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- Falcon 9 Block 5 booster B1049. (Pauline Acalin)
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- Falcon Heavy clears the tower. (Photo: Tom Cross/Teslarati)
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- BFR (2018) breaks through a cloud layer shortly after launch. (SpaceX)
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- SpaceX’s Starhopper seen in a January render and a January photo. (SpaceX/Elon Musk)
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- One of the first two prototype Starlink satellites separates from Falcon 9’s upper stage, February 2018. (SpaceX)
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- SpaceX’s first two Starlink prototype satellites are pictured here before their inaugural launch, showing off a thoroughly utilitarian bus and several advanced components. (SpaceX)
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.
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)
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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- A bittersweet sunrise as Falcon 9 B1049 arrives in port. (Pauline Acalin)
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- Workers process Falcon 9 B1048 after recovery. (Pauline Acalin)
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- Workers process Falcon 9 B1046 after the booster’s third flawless launch and landing in seven months. (Pauline Acalin)
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- SpaceX recovery technicians work on Falcon 9 with similar cherry-picker lifts, offering a sense of scale of the new Starship water tower. (Pauline Acalin)
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.
Happy Labor Day! We feel so lucky to work with such an awesome team @SpaceX. pic.twitter.com/aXQXN3fGlA
— SpaceX (@SpaceX) September 3, 2013
Elon Musk
Elon Musk proposes Grok 5 vs world’s best League of Legends team match
Musk’s proposal has received positive reception from professional players and Riot Games alike.
Elon Musk has proposed a high-profile gaming challenge for xAI’s upcoming Grok 5. As per Musk, it would be interesting to see if the large language model could beat the world’ best human League of Legends team with specific constraints.
Musk’s proposal has received positive reception from professional players and Riot Games alike, suggesting that the exciting exhibition match might indeed happen.
Musk outlines restrictions for Grok
In his post on X, Musk detailed constraints to keep the match competitive, including limiting Grok to human-level reaction times, human-speed clicking, and viewing the game only through a camera feed with standard 20/20 vision. The idea quickly circulated across the esports community, drawing commentary from former pros and AI researchers, as noted in a Dexerto report.
Former League pro Eugene “Pobelter” Park expressed enthusiasm, offering to help Musk’s team and noting the unique comparison to past AI-versus-human breakthroughs, such as OpenAI’s Dota 2 bots. AI researcher Oriol Vinyals, who previously reached Grandmaster rank in StarCraft, suggested testing Grok in RTS gameplay as well.
Musk welcomed the idea, even responding positively to Vinyals’ comment that it would be nice to see Optimus operate the mouse and keyboard.
Pros debate Grok’s chances, T1 and Riot show interest
Reactions weren’t universally optimistic. Former professional mid-laner Joedat “Voyboy” Esfahani argued that even with Grok’s rapid learning capabilities, League of Legends requires deep synergy, game-state interpretation, and team coordination that may be difficult for AI to master at top competitive levels. Yiliang “Doublelift” Peng was similarly skeptical, publicly stating he doubted Grok could beat T1, or even himself, and jokingly promised to shave his head if Grok managed to win.
T1, however, embraced the proposal, responding with a GIF of Faker and the message “We are ready,” signaling their willingness to participate. Riot Games itself also reacted, with co-founder Marc Merrill replying to Musk with “let’s discuss.” Needless to say, it appears that Riot Games in onboard with the idea.
Though no match has been confirmed, interest from players, teams, and Riot suggests the concept could materialize into a landmark AI-versus-human matchup, potentially becoming one of the most viewed League of Legends events in history. The fact that Grok 5 will be constrained to human limits would definitely add an interesting dimension to the matchup, as it could truly demonstrate how human-like the large language model could be like in real-time scenarios.
Tesla has passed a key milestone, and it was one that CEO Elon Musk initially mentioned more than nine years ago when he published Master Plan, Part Deux.
As per Tesla China in a post on its official Weibo account, the company’s Autopilot system has accumulated over 10 billion kilometers of real-world driving experience.
Tesla China’s subtle, but huge announcement
In its Weibo post, Tesla China announced that the company’s Autopilot system has accumulated 10 billion kilometers of driving experience. “In this respect, Tesla vehicles equipped with Autopilot technology can be considered to have the world’s most experienced and seasoned driver.”
Tesla AI’s handle on Weibo also highlighted a key advantage of the company’s self-driving system. “It will never drive under the influence of alcohol, be distracted, or be fatigued,” the team wrote. “We believe that advancements in Autopilot technology will save more lives.”
Tesla China did not clarify exactly what it meant by “Autopilot” in its Weibo post, though the company’s intense focus on FSD over the past years suggests that the term includes miles that were driven by FSD (Beta) and Full Self-Driving (Supervised). Either way, 10 billion cumulative miles of real-world data is something that few, if any, competitors could compete with.
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Elon Musk’s 10-billion-km estimate, way back in 2016
When Elon Musk published Master Plan Part Deux, he outlined his vision for the company’s autonomous driving system. At the time, Autopilot was still very new, though Musk was already envisioning how the system could get regulatory approval worldwide. He estimated that worldwide regulatory approval will probably require around 10 billion miles of real-world driving data, which was an impossible-sounding amount at the time.
“Even once the software is highly refined and far better than the average human driver, there will still be a significant time gap, varying widely by jurisdiction, before true self-driving is approved by regulators. We expect that worldwide regulatory approval will require something on the order of 6 billion miles (10 billion km). Current fleet learning is happening at just over 3 million miles (5 million km) per day,” Musk wrote.
It’s quite interesting but Tesla is indeed getting regulatory approval for FSD (Supervised) at a steady pace today, at a time when 10 billion miles of data has been achieved. The system has been active in the United States and has since been rolled out to other countries such as Australia, New Zealand, China, and, more recently, South Korea. Expectations are high that Tesla could secure FSD approval in Europe sometime next year as well.
News
Elon Musk’s Boring Company reveals Prufrock TBM’s most disruptive feature
As it turns out, the tunneling startup, similar to other Elon Musk-backed ventures, is also dead serious about pursuing reusability.
The Boring Company has quietly revealed one of its tunnel boring machines’ (TBMs) most underrated feature. As it turns out, the tunneling startup, similar to other Elon Musk-backed ventures, is also dead serious about pursuing reusability.
Prufrock 5 leaves the factory
The Boring Company is arguably the quietest venture currently backed by Elon Musk, inspiring far fewer headlines than his other, more high-profile companies such as Tesla, SpaceX, and xAI. Still, the Boring Company’s mission is ambitious, as it is a company designed to solve the problem of congestion in cities.
To accomplish this, the Boring Company would need to develop tunnel boring machines that could dig incredibly quickly. To this end, the startup has designed Prufrock, an all-electric TBM that’s designed to eventually be fast enough as an everyday garden snail. Among TBMs, such a speed would be revolutionary.
The startup has taken a step towards this recently, when The Boring Company posted a photo of Prufrock-5 coming out of its Bastrop, Texas facility. “On a rainy day in Bastrop, Prufrock-5 has left the factory. Will begin tunneling by December 1. Hoping for a step function increase in speed,” the Boring Company wrote.
Prufrock’s quiet disruption
Interestingly enough, the Boring Company also mentioned a key feature of its Prufrock machines that makes them significantly more sustainable and reusable than conventional TBMs. As per a user on X, standard tunnel boring machines are often left underground at the conclusion of a project because retrieving them is usually more expensive and impractical than abandoning them in the location.
As per the Boring Company, however, this is not the case for its Prufrock machines, as they are retrieved, upgraded, and deployed again with improvements. “All Prufrocks are reused, usually with upgrades between launches. Prufrock-1 has now dug six tunnels,” the Boring Company wrote in its reply on X.
The Boring Company’s reply is quite exciting as it suggests that the TBMs from the tunneling startup could eventually be as reusable as SpaceX’s boosters. This is on brand for an Elon Musk-backed venture, of course, though the Boring Company’s disruption is a bit more underground.
Tesla is being accused of infringing robotics patents by a company called Perrone Robotics, which is based out of Charlottesville, Virginia.
The suit was filed in Alexandria, Virginia, and accuses Tesla of knowingly infringing upon five patents related to robotics systems for self-driving vehicles.
The company said its founder, Paul Perrone, developed general-purpose robotics operating systems for individual robots and automated devices.
Perrone Robotics claims that all Tesla vehicles utilizing the company’s Autopilot suite within the last six years infringe the five patents, according to a report from Reuters.
Tesla’s new Safety Report shows Autopilot is nine times safer than humans
One patent was something the company attempted to sell to Tesla back in 2017. The five patents cover a “General Purpose Operating System for Robotics,” otherwise known as GPROS.
The GPROS suite includes extensions for autonomous vehicle controls, path planning, and sensor fusion. One key patent, U.S. 10,331,136, was explicitly offered to Tesla by Perrone back in 2017, but the company rejected it.
The suit aims to halt any further infringements and seeks unspecified damages.
This is far from the first suit Tesla has been involved in, including one from his year with Perceptive Automata LLC, which accused Tesla of infringing on AI models to interpret pedestrian/cyclist intent via cameras without licensing. Tesla appeared in court in August, but its motion to dismiss was partially denied earlier this month.
Tesla also settled a suit with Arsus LLC, which accused Autopilot’s electronic stability features of infringing on rollover prevention tech. Tesla won via an inter partes review in September.
Most of these cases involve non-practicing entities or startups asserting broad autonomous vehicle patents against Tesla’s rapid iteration.
Tesla typically counters with those inter partes reviews, claiming invalidity. Tesla has successfully defended about 70 percent of the autonomous vehicle lawsuits it has been involved in since 2020, but settlements are common to avoid discovery costs.
The case is Perrone Robotics Inc v Tesla Inc, U.S. District Court, Eastern District of Virginia, No. 25-02156. Tesla has not yet listed an attorney for the case, according to the report.
Elon Musk proposes Grok 5 vs world’s best League of Legends team match
Elon Musk’s Boring Company reveals Prufrock TBM’s most disruptive feature
