Virgin Galactic is chopping prices and decreasing workers because it seems to scale manufacturing of its next-gen line of suborbital spaceplanes.
In a memo to workers despatched Tueday, Virgin Galactic CEO Michael Colglazier stated that uncertainty in capital markets and geopolitical unrest have made “near-term entry to capital a lot much less favorable.” That’s not excellent news for an organization like Virgin Galactic, which has concurrently needed to concentrate on scaling industrial operations of its preliminary autos, the VSS Unity suborbital car and the Eve plane, whereas additionally working to create a fleet of next-gen ships the corporate calls Delta.
“The Delta ships are highly effective financial engines. To deliver them into service, we have to prolong our robust monetary place and cut back our reliance on unpredictable capital markets,” Colglazier stated. “We are going to accomplish this, but it surely requires us to redirect our sources towards the Delta ships whereas streamlining and decreasing our work outdoors of the Delta program.”
Colglazier added that the corporate will probably be calling every worker to substantiate their employment standing, and that these calls will proceed by way of Thursday. The Orange County, California-based firm had round 1,100 workers as of earlier this yr.
Virgin Galactic, which simply accomplished its fifth industrial flight of the VSS Unity spaceplane, has beforehand stated that it’s trying to deliver Delta into industrial service by 2026 – but it surely virtually actually will come at no small price. Whereas Virgin Galactic has not publicly acknowledged how a lot it anticipates it would spend to deliver Delta ships on-line, the corporate has already spent many hundreds of thousands on analysis and growth for the long run fleet.
However having Delta ships operational will seemingly be key to the corporate ever hoping to attain profitability. These ships are being designed to fly extra typically – as in, as much as 400 instances per yr – primarily based on a “standardized manufacturing mannequin” that can make them cheaper to provide and keep.
The corporate reported a web lack of $134.4 million on the finish of the second quarter and $1.9 million in revenues. Virgin Galactic ended the quarter with round $980 million of money and securities readily available.
Virgin Galactic didn’t present additional particulars on the layoffs, together with the variety of workers affected. Extra info will probably be supplied throughout a 3rd quarter earnings name scheduled for Wednesday, the corporate stated.