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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
Tesla launched the slightly larger Model Y L in China last year, and it became a hit in no time. The longer wheelbase, larger interior, and slightly more forgiving legroom area in the Model Y L became a sought-after possibility for U.S. buyers, who have been begging the company for a larger SUV.
Now, Tesla needs it more than ever, especially considering the Model X was discontinued alongside its Model S sibling earlier this year. It looks to be more likely than ever, and based on recent reports, it will fall in line with CEO Elon Musk’s prediction that it would arrive in the United States in late 2026.
Recent reports from Forbes and Not a Tesla App both have indicated Tesla plans to bring the Model Y L to the U.S. this year. The reports cite “credible sources,” and an analyst from AutoForecast Solutions named Sam Fiorani stated that the car would enter production later this year.
Fiorani said:
“China, Australia, and India are supplied by the factory in China, which will not supply vehicles to the U.S. Production of the Model Y L is expected to begin in the U.S. in September, which will lead to sales beginning before the end of 2026.”
Production would take place at Gigafactory Texas.
Additionally, a few Model Y L units have been spotted under wraps in the United States, giving more indication that Tesla plans to bring the vehicle to the U.S. When Tesla is close to launching a vehicle in the U.S., it is not uncommon to see these models with the exact car covers that you see below:
Looks like another Tesla Model Y L was spotted in the U.S.! pic.twitter.com/jhsdkcN5Go
— TESLARATI (@Teslarati) June 26, 2026
It makes sense, especially considering Musk hinted the Model Y L would make it to the U.S. in late 2026, but it was up in the air. The CEO said the advent of self-driving might not warrant a larger SUV coming to the U.S. market specifically.
The problem is, consumers do not want to hear that. They love Tesla’s tech, FSD, and other features, but they need more space for growing families. The Model X is gone, and the most anyone can fit in a Tesla right now is seven people in the seven-seat Model Y. That back row is truly only large enough to fit small children comfortably.
Tesla fans have requested a full-size SUV, and the company has made some hints that it could be in the plans.
The Model Y and Model Y L differ noticeably in size, with the Model Y L being a stretched, six-seat variant designed for great interior room. The Standard Model Y measures approximately 4,790mm in length, 1,982 mm in width with the mirrors folded, 1,624mm in height, and 2,890mm in wheel base.
In contrast, the Model Y L extends to be about 4,969–4,976mm long (roughly 179mm or 7 inches longer), stands 1,668mm tall (+44mm), and features a significantly longer 3,040 mm wheelbase (+150mm), while maintaining the same width.
This elongation primarily benefits rear passenger space and enables a 2+2+2 seating layout with captain’s chairs, though it slightly reduces maximum cargo capacity behind the rearmost seats and adds a bit of overall mass and turning radius. The result is a more spacious family hauler that still shares the core footprint and agile character of the original Model Y.
In a major development that will inevitably strengthen Tesla’s dominant position in the American EV market, Polestar has been effectively banned from selling new vehicles in the United States, starting with the 2027 model year.
The U.S. Department of Commerce denied Polestar authorization under the Connected Vehicle Rule, which prohibits vehicles containing certain connected technologies (Cellular, Wi-Fi, Bluetooth, etc.) linked to China or Russia due to national security risks, including potential data collection on American drivers.
🚨 A Tesla competitor goes down
Polestar will no longer sell new vehicles in the United States starting with the 2027 model year.
The U.S. Department of Commerce denied the brand authorization under the Connected Vehicle Rule, which restricts the sale of cars with software and… pic.twitter.com/TrwnQeoiES
— TESLARATI (@Teslarati) June 25, 2026
Polestar, which is majority-owned by China’s Geely Holding, could not obtain the required exemption despite producing some models domestically.
Polestar confirmed it will sell off any remaining inventory of the Polestar 3 and Polestar 4 models, while continuing service and warranty support for existing customers. No new models or major refreshes will reach U.S. buyers, and the company is pivoting its growth strategy to Europe, where it already generates the vast majority of its sales.
The outcome removes a direct premium EV competitor that had positioned itself as a stylish, performance-oriented alternative to Tesla’s lineup. The Polestar 2 challenged the Model 3, while the Polestar 3 and 4 targeted segments overlapping with the Model Y and upcoming Tesla offerings. Polestar’s U.S. sales had already been sluggish amid intense competition and slower demand, representing just 6 percent of its global volume in the first quarter of 2026.
While Polestar was not on Tesla’s level in the U.S., it still places a dent in the evergrowing field of Tesla competitors in the country, where it has long dominated EV sales.
Tesla faces none of these hurdles. As a U.S.-founded and U.S.-headquartered company with major manufacturing in Fremont, Austin, and Nevada, Tesla’s vehicles are built with compliant domestic and allied supply chains. Its Full Self-Driving technology, over-the-air software updates, and vertically integrated ecosystem were developed entirely in-house without foreign ownership entanglements that trigger national security reviews, at least in the U.S.
Of course, it did face a similar threat in China a few years back:
Elon Musk responds to reports of Tesla ban among China’s military over security concerns
The Connected Vehicle Rule, first advanced under the prior administration and upheld under the current one, is part of a broader U.S. effort to protect the domestic auto industry and critical technology from Chinese influence. High tariffs on Chinese-made EVs and related restrictions have already reshaped the market. Tesla benefits directly: it avoids these barriers while continuing to lead in U.S. EV sales volume, Supercharger network expansion, and energy storage integration.
By clearing Polestar from the new-vehicle playing field, the policy reduces competitive pressure in the premium and performance EV segments where Tesla has invested billions. American consumers seeking cutting-edge electric vehicles now have one fewer option tied to foreign adversaries — and one clearer path to the market leader that has driven the EV transition from the start.
For Tesla, this is more than regulatory relief. It is a strategic tailwind that reinforces its position as America’s premier EV innovator at a time when domestic manufacturing and technological independence matter most.
Tesla Cybercab stands to gain from new rules that the Trump Administration is aiming to enforce on autonomous vehicles. On Thursday, NHTSA, under the Trump Administration’s U.S. Department of Transportation, commenced rulemaking on the Federal Motor Vehicle Safety Standards (FMVSS).
This effort aims to eliminate the mandate for manual brake pedals in vehicles that are designed to be driven exclusively by automated driving systems. This would impact the Tesla Cybercab, which the company has stated would operate without a steering wheel or pedals.
Tesla Cybercab launch is imminent after latest sighting at Giga Texas
The Trump Administration is looking to revise FMVSS No. 135, which requires standard braking systems on light-duty vehicles.
Currently, the regulation requires light-duty cars to use traditional manual braking systems that allow operators to slow the vehicle. With the advent of self-driving in the U.S., these regulations need updating, and these are the changes that could come to FMVSS No. 135:
- Removes requirements for hand- or foot-operated brake controls for vehicles designed never to be operated by a human. Existing rules still apply to AVs that retain manual controls.
- All subject vehicles must still meet the same stopping distance performance criteria via alternative testing procedures.
- While this update ensures AVs can physically stop when commanded, NHTSA is separately developing safety performance requirements for AVs in real-world driving scenarios.
- NHTSA will continue to use its broad defect enforcement authority to investigate unsafe ADS behavior and oversee recalls.
As autonomy becomes a greater part of passenger travel, these types of rule adjustments will be more than reasonable. It will give manufacturers the ability to self-certify their vehicles and avoid any red tape that could ultimately delay the deployment of these vehicles.
Administrators are also incredibly excited about the opportunity to play a role in the advancement of self-driving vehicles.
“We are at the cusp of the greatest technological revolution in vehicle technology since the innovation of the Model T,” NHTSA Administrator Jonathan Morrison said. “If we want America to lead the way, we have to reimagine our regulatory framework. That’s why under Secretary Sean Duffy’s AV Framework, NHTSA is tearing down pointless barriers to innovative designs while strengthening the fundamental safety requirements that matter and holding AV developers accountable for safe performance.”
The Cybercab entered mass production at Gigafactory Texas in April. Tesla ultimately plans to push the vehicle into its Robotaxi fleet, potentially when frameworks like these are established.
Tesla looks keen to bring larger Model Y L to the U.S.
One of Tesla’s biggest threats just got banned in the U.S.
