SpaceX Layoffs

[MechE31]

The 10% number was from multiple, independent sources inside the company.

This impacted all functions across the board, salary, hourly, engineers, etc...

[Lars_J]

The 10% number was from multiple, independent sources inside the company.

This impacted all functions across the board, salary, hourly, engineers, etc...

I hate to be a nitpicker, but that means it wasn't "first hand knowledge" you have. That's second hand information, even if sourced from multiple people - right?

[MechE31]

The 10% number is second hand.

I know first hand that people from across the sites were let go. I personally know someone from each site that was let go and know them to be across all functions.

[yg1968]

I can confirm via first hand knowledge this did happen on Monday. All 4 major sites (Hawthorne, Cape, McGregor and Vandy) were impacted.

These were not deemed layoffs or reduction in workforce, just so happens 10% of the workforce was let go in one day.

Not that it matters but letting go of an employee means laying them off (unless you are firing them which isn't the case here). Layoffs happen for financial/economic reasons (usually because there is less work than expected). In any event, best of luck for those affected.

[ArbitraryConstant]

This is right around perf review time for a lot of companies.

[yg1968]

unless you are firing them which isn't the case here

How do you know?

Because you don't fire 10% of your workforce on the same day. You fire someone after several warnings or after gross negligence, etc. The odds of that hapenning to 10% of your workforce on the same day is incredibly low.

[RocketGoBoom]

I've been wondering for a long time how they could sustain all the people and all the activities on so little revenue.  It looks from the outside like they have been growing on the back of a large number of deposits and relatively few actual flight dollars.  Of course, looks can be deceiving but this news, if true, would lend a bit of support to that conjecture.

Just for rough numbers, if we assume that each employee costs on average $100,000 per year for a combo of salary + benefits + employee taxes + whatever....  3,000 employees X $100,000 each = $300  million per year.

Supposedly they have a $5 billion backlog. So $300 million per year for salaries is likely within reason as a percentage of total revenue if the revenue actually materializes with successful launches for NASA and commercial customers.

[butters]

SpaceX has reached topping mode. Now in stable replenish. What you're seeing are periodic puffs of gaseous oxygen being vented as it boils off to maintain super-cool conditions inside the vehicle.

[Llian Rhydderch]

What this signals about SpaceX will be a strong function of what, and whether, additional layoffs follow within a year or so.

If the number is approximately 10%, as early reports indicate, then it makes sense that senior management would have endeavored to have the layoff across all functions of the company.  And I'll be surprised if they don't ensure they hit (at least) that same percentage out of the management ranks.

However, in any company that has experienced rapid growth, it belies human capability to think that any real-life hiring process can achieve better than 80-90% in hiring the "right" kind of folks for the SpaceX culture and performance environment. 

If this layoff is in isolation, and not a "phase 1" to something else that follows, then I would speculate that every function was asked to participate, and that many (in management) did not have a "real hard" time finding which 10% of their staff might not be the folks they want to continue to exchange money for labor with in order to have the best chance of achieving SpaceX long-term and short-term objectives.

[RonM]

As I mentioned on the first page, Spacex.com lists over 360 job openings.

http://www.spacex.com/careers/list

Now that seems suspicious since some of you have pointed out that 10% of their workforce is over 300 people. Does anyone know if there were that many job openings a few days ago?

I hope that is a coincidence and not an indication that SpaceX just got rid of 10% of their staff only to immediately replace them. I've seen that thing before and it is a total morale breaker for the remaining workforce. When management starts acting like that, it's hard to keep good employees.

[hop]

As I mentioned on the first page, Spacex.com lists over 360 job openings.

http://www.spacex.com/careers/list

Now that seems suspicious since some of you have pointed out that 10% of their workforce is over 300 people. Does anyone know if there were that many job openings a few days ago?

Just eyeballing https://web.archive.org/web/*/http://www.spacex.com/careers/list it looks like there has been a similar number of listings for quite a while.

[bob12201]

I heard from word of mouth that roughly 150 people were let go. So that's definitely less than 10%.

[Syrinx]

I don't know if this is the case here with SpaceX, but this is what happens typically:

Companies grow very quickly, and with lofty recruiting goals it's easy for employees to sneak in that for whatever reason just can't keep up.  Over time, such employees accumulate.

It's incredibly difficult to straight-up fire employees for performance reasons.  Performance (under-performance) has to be documented.  The employee must be given a chance to improve his/her performance.  Lack of improvement must be documented.  And then after a year or so, the termination procedure can begin.

So instead, what companies do is wait for a reason (major or minor) to have a general lay-off, or a reduction in force (RIF).  These terms have legal definitions and are clearly defined.  During a RIF, almost any employee can be terminated without cause.  No performance documentation is necessary.  And there are tax advantages for the company as well.

Plenty of medium-sized, healthy companies do this.  I want to say "most medium-sized, healthy companies" but I can't state that with certainty.  My company certainly does it, and we even advertise that we do so.  It's happened at my company each of the last two years, and three of the last five.  Every so often, the bottom 10% of employees are let go based on somewhat arbitrary performance metrics.

As I said, I don't know if this is the case here.

[mme]

unless you are firing them which isn't the case here

How do you know?

Because you don't fire 10% of your workforce on the same day. You fire someone after several warnings or after gross negligence, etc. The odds of that hapenning to 10% of your workforce on the same day is incredibly low.

I have no insight to what's going on here.  Some companies actually use layoffs as a "kinder, gentler" way to cull the workforce.  There are benefits to both the employee and the employer for layoffs as opposed to firing people.  Generally, people that are fired are not eligible for unemployment benefits.  And there is much less stigma attached to being layed off, rather than fired.  From the employer's stand point, it's more expensive in the short term to lay people off due to severance packages and unemployment benefits.  But you are much less likely to be sued for wrongful termination.

There is no doubt a financial motivation behind the layoffs, and I am disappointed by this news.  But having been around the block a few times, I'm reluctant to read too much into it.  My thoughts and wishes are with those that lost their jobs and I hope they find rewarding work quickly.

Edit: To be clear, layoffs are rarely a good sign.  But they don't always mean the company is in dire straights.

[aero]

Perhaps SpaceX needs some cash flow to build their Texas launch facility?

[Darkseraph]

I'm not surprised at this news. At 2 or 3 launches a year of a rocket that they charge between 60 and 120 million for, I'm not sure how they could possibly be operating in the anything but the red. That would barely even cover their staffing costs, never mind overheads, capital, energy and materials. I can't imagine how that could be profitable.....or even cash-flow neutral.

*Do correct me if I'm wrong but I assume its not launch industry practice to dump a truck full of money at Hawthorne for launches that are not going to happen until 3 or more years time? That the satellite operator basically puts a deposit down?

[pseudovector]

More than likely the company just went through its yearly performance reviews. As such, they have a lot of data on which employees have been dutifully performing their job, and which ones have been slacking (at least by SpaceX standards).

Since SpaceX is all innovation and ensuring that the best of the best are working to move the company forward, the 10% figure probably refers to the "bottom" 10% of the company, per the performance reviews.

More than likely, the vast amount of people that were laid off were on the production side, since they can be more easily replaced.

I would be surprised if they cut each department by 10% across the board.

[Chris Bergin]

Well there's certainly SpaceXers talking on social media about people being let go, but I doubt it's 10 percent (which would be a lot) and there are mentions of performance reviews (without it being the definite reason).

I think there were some - as always happens on the internet - exaggerations, especially on the reason for the losses (some reasons being very easy to dismiss), as this would have really snowballed by now if it was an unusual situation (10 percent).

I'd go after it with SpaceX PAO, but I'd rather bother them about their rockets, manifest and future - because prioritizing a "OMG, I hear you let go some workers? Can you confirm" question immediately makes us look like we're going after a negative angle, and that really isn't what we're about here (despite the fact this is of massive interest, as we broke the forum "people online at the same time" record (at 8am GMT!) due to some heavy hitters on Twitter linking this thread up.

[Nomadd]

More than likely the company just went through its yearly performance reviews. As such, they have a lot of data on which employees have been dutifully performing their job, and which ones have been slacking (at least by SpaceX standards).

Since SpaceX is all innovation and ensuring that the best of the best are working to move the company forward, the 10% figure probably refers to the "bottom" 10% of the company, per the performance reviews.

More than likely, the vast amount of people that were laid off were on the production side, since they can be more easily replaced.

I would be surprised if they cut each department by 10% across the board.

The easiest and most obvious answer. As fast as they've been hiring, a <10% cull would be perfectly understandable. Letting the company become bloated with non contributing employees would be counter to their whole philosophy. The reviews could be bad because of ability or attitude. You can't score 100% on new hires. And, like others have said, using the term "layoff" is a lot nicer than termination for lack of performance.

[GREverett]

Here is a little something more than rumor on some restructuring at McGregor in Texas...
http://www.kwtx.com/home/headlines/SpaceX_Announces_Restructuring_Layoffs_At_Local_Facility_115958794.html