The space industry has experienced significant growth and investment in recent years, with employment in the private space sector soaring about 30% over the last five years compared to less than 10% for the United States overall. However, 2023 and 2024 have seen some high-profile layoffs, workforce reductions, and shutdowns at major space companies, signaling potential challenges and restructuring in the industry.
NASA’s Jet Propulsion Laboratory Layoffs
In February 2024, NASA’s Jet Propulsion Laboratory (JPL) in Pasadena announced they would be laying off approximately 530 employees, or about 8% of their workforce, following budget uncertainty for 2024. This significant reduction in JPL’s staff highlights the impact of government budget pressures on the civil space sector.
Commercial Space Companies Face Layoffs and Shutdowns
Several prominent commercial space companies have experienced layoffs, restructuring, and even shutdowns in 2023 and 2024:
- Sierra Space: In November 2023, Sierra Space laid off 165 employees who had been working on its Dream Chaser vehicle, describing it as a “realignment” of company resources after completing the first Dream Chaser vehicle, named Tenacity. The company also let go of some contractors who had supported the assembly of Dream Chaser, with CNBC reporting that hundreds of people overall, both employees and contractors, were let go.
- Boeing (SLS Program): In April 2024, Boeing announced it would cut its workforce on the Space Launch System (SLS) program due to schedule uncertainty and external factors. The exact number of layoffs was not disclosed, but the cuts are expected to delay the development and testing of the SLS rocket’s Rocket 4 and Launch System 2.0.
- Northrop Grumman: The defense contractor warned its California-based space sector employees of potential layoffs in February 2024, with sources indicating that about 1,000 employees at the company’s Space Park in Redondo Beach could be impacted. In August 2024, Northrop Grumman announced plans to lay off 550 full-time employees at its space business facilities in Redondo Beach and Manhattan Beach, California.
- Momentus: The California-based space startup faced significant financial difficulties in 2023 and 2024, laying off 20% of its staff in December 2023 and another 30% in Q2 2023. The company’s market value dropped to almost $5 million in early 2024, and it had to abandon plans for a March 2024 mission due to limited liquidity and cash balances.
- Astra Space: Astra laid off 16% of its workforce in November 2022 and an additional 25% in August 2023, focusing more on its spacecraft propulsion business. The company faced financial challenges and went private in March 2024, with its stock no longer listed on the Nasdaq exchange.
- Virgin Orbit: Founded by British billionaire Richard Branson, the company filed for Chapter 11 bankruptcy in April 2023 after a major launch failure in January. It had reached a $3.5 billion valuation at its peak but was forced to auction off its assets.
- MAXAR: The Colorado based company made an unspecified number of layoffs following their acquisition by Advent International.
- Virgin Galactic: In February 2023, Virgin Galactic announced it would be laying off around 100 employees, or 11% of its workforce, as part of a restructuring effort to reduce costs and streamline operations. The company has faced delays in its commercial space tourism program and has yet to begin regular flights.
- ABL Space Systems: The launch vehicle developer laid off a significant portion of its workforce in August 2024 after losing a rocket in a static-fire test. The exact number of layoffs was not disclosed, but the company had about 170 employees prior to the reduction.
- Planet: Earth observation company Planet announced in June 2024 that it would lay off about 180 employees, or 17% of its workforce, in an effort to reduce costs and align resources with market opportunities. This follows a previous layoff of 117 employees (10% of the workforce) in July 2023.
- Satellogic: In June 2024, imaging company Satellogic announced another round of layoffs, reducing its workforce by approximately 70 full-time equivalents. This comes after a previous workforce reduction of 34 employees (13% of its employee base) in May 2024, as part of ongoing efforts to reduce operating costs and control spending.
- Airbus Defence and Space: Airbus announced plans to cut 2,362 jobs in its Defence and Space division over the next two years, citing a “flat space market and postponed contracts on the defence side”. The job cuts will impact 829 positions in Germany, 630 in Spain, 404 in France, and 357 in Britain, with an additional 142 jobs cut in other countries.
- Kleos Space: The company, which was in its infancy, went out of business in 2023.
Industry Outlook and Government Partnerships
Despite these layoffs and shutdowns, experts suggest that the recent budget pressure and workforce reductions are a short-term setback for the space industry, which is still on track for unprecedented growth in the long term. Government investment in space has grown over the last five years at a compound annual growth rate of around 10% globally.
To alleviate funding challenges, the U.S. government is expected to continue pursuing innovation in the commercial market and leveraging partnerships with private space companies. By harnessing the entrepreneurial spirit and deep capital markets of the private sector, the government can ensure ongoing space superiority and overtake the efforts of authoritarian states like China.
Summary
While the space industry has experienced significant layoffs, workforce reductions, and even shutdowns in 2023 and 2024, particularly in the civil and commercial sectors, the long-term outlook for the industry remains positive. With continued government investment and partnerships with innovative private companies, the space economy is projected to rise from its current value of $546 billion to at least $772 billion by 2027. The recent challenges, while difficult for the affected employees and companies, may ultimately lead to a more efficient and competitive space industry poised for future growth and success.
