SpaceX Layoffs

[Dave G]

Hopefully SpaceX is smarter about this.

The smart way is to give a strong written warning and then 6 months to improve.  This gives the employee 3 choices:
a) get their act together and start preforming well
b) find another job
c) continue to perform poorly and wait to get the axe

Given that most employees would choose options a) or b), firing should be a rare occurrence.  The fact that SpaceX fired a lot of employees at once would suggest that they don't give adequate warning and/or time for the employee to correct the issue.

[veblen]

Statement on SpaceX layoffs from communications director John Taylor: I can tell you that there was an annual review cycle completed recently, along with some rebalancing of resources. Our resulting headcount reduction was less than 5 percent. SpaceX expects to see net positive employee growth in 2014 of approximately 20 percent. - via Twitter

A very big thank you to Doug for getting an official response from SpaceX.

Edit: Hmm.. Amy Svitak is claiming the scoop on Aviation Week's blogs.

SpaceX could of been forthright and announced a "rebalancing of resources" before they got rid of people. But no, they fire first and let the rumour mill run.

Nice going SpaceX - Not.

[Coastal Ron]

The fact that SpaceX fired a lot of employees...

You are assuming they were "fired", which implies that they were let go for cause - and that assumes the employees affected have known that they were on a track that could end with being fired.

However it could have been a layoff, which achieves the same result but isn't necessarily because of an individuals performance.  Usually the compensation when being laid off versus fired is much better.

I think it was mainly a strategic layoff.

[Coastal Ron]

SpaceX could of been forthright and announced a "rebalancing of resources" before they got rid of people.

Just because large public companies have to be transparent about their staffing for stock purposes doesn't mean privately held companies need to do the same.  As a manager at privately held companies we never announced layoffs (or firings) prior to them be completed.

But no, they fire first and let the rumour mill run.

Nice going SpaceX - Not.

And what negative things happened from a business standpoint because of the course they took?

Do rumors affect their non-publicly traded stock price?  Did they lose customers because of it?

Other than a loss in productivity for a world-wide army of people like us that post comments to SpaceX-related blogs topics, I'm not seeing any downside for the way that SpaceX handled their internal affairs.

[clongton]

Nice going SpaceX - Not.

SpaceX PAO said it was a layoff, and was less than 5% of the employees. They said it was a business decision, not a personnel problem solution. That's the way it goes in right-to-work states. Know-it-all's should just give it a rest.

[Coastal Ron]

I think it was mainly a strategic layoff.

It could have been a bubble bath too. Got anything to back it up, other than the original rumor?

I base my guesses on 20 years of management experience in development and manufacturing companies (with relevant firing and layoff experience), and the wording of the statement from SpaceX.

And I agree, time to move on...

[a_langwich]

The fact that SpaceX fired a lot of employees...

You are assuming they were "fired", which implies that they were let go for cause - and that assumes the employees affected have known that they were on a track that could end with being fired.

However it could have been a layoff, which achieves the same result but isn't necessarily because of an individuals performance.  Usually the compensation when being laid off versus fired is much better.

I think it was mainly a strategic layoff.

Did you miss the SpaceX response that the firings were related to annual performance reviews?

I've been browsing some "employer review" websites reading reviews from SpaceX employees, and I would say they probably had/have some disgruntled employees.  It seems they've been running 70 hour work weeks for a while...that's going to take a toll (those with families especially), and some of the reviews reflected this.  It's obviously cheaper to run two shifts than to pay overtime, so here's hoping they can right-size their employment and associated training.

[QuantumG]

SpaceX PAO said it was a layoff

Where?

It really does appear that people don't know what a layoff is. When you lay people off you are eliminating the jobs not the particular employees doing those jobs. If you're still hiring while you're firing, you're not laying people off. That's why Taylor explained that their headcount is still going up.

[IslandPlaya]

If you've ever worked in computer game development you will understand that there is a certain amount of 'layoff' every quarter due to underperfomance/burnout.
New people get hired.
It seems very cruel, but that is the way hi-tech business works these days.

[sdsds]

The strong implication is that this was a regularly scheduled (i.e. annual) event. It would be great if someone could find hints from a year ago that a similar portion of the workforce had their employment terminated back then. Or is it possible this is the "first annual" event of this kind?

[John.bender]

Seriously guys, this is standard and to assume they shocked the employees by a surprise review is doubtful. Trim the deadwood and reward the performers is a good business practice. Even though they are private it does not mean they don't practice sound hiring and firing/ layoff procedures. This makes me even feel better about the company and I already think they are fantastic.

[QuantumG]

Talked to Shotwell briefly after panel. She said reports of layoffs at SpaceX "overblown"; simply result of annual review process. via Twitter

[IslandPlaya]

Seriously guys, this is standard and to assume they shocked the employees by a surprise review is doubtful. Trim the deadwood and reward the performers is a good business practice. Even though they are private it does not mean they don't practice sound hiring and firing/ layoff procedures. This makes me even feel better about the company and I already think they are fantastic.

Agreed. It is standard practice.
Intel. MS. Google etc...

[Llian Rhydderch]

SpaceX PAO said it was a layoff

Where?

It really does appear that people don't know what a layoff is. When you lay people off you are eliminating the jobs not the particular employees doing those jobs. If you're still hiring while you're firing, you're not laying people off. That's why Taylor explained that their headcount is still going up.

Let's be a little more accepting of discussion.  Words in English rarely have only one sense or meaning.  Layoff is no exception.

However the word might be used in some countries/cultures/situations/legal regimes, the word is widely used in US practice, especially but not exclusively in right-to-work states, to include the sense to be one correct way of characterizing the event that just occurred at SpaceX. 

While there are management-initiated separations that are the result of "performance" or of violation of some "condition of employment".  These are often referred to as "firings", or being fired). ...

... There are also, in US practice (and especially in the high tech private sector) management-initiated separations that are typically called layoffs that result in a rebalancing of resources, eliminating a typically larger group of people (maybe 2 to 5 or 10% of a companies workforce) , often but not always on a single day.  These may be totally and permanently eliminating a certain job.  But in high-tech jobs, it is often quite impossible to say as job assignments for any particular job title and nominal set of job responsibilities are often literally changing on a daily or weekly basis, as some items in a project plan are completed and others move up or down in priority depending on the business situation.  These "layoffs" do result in the elimination of a job for particular individuals.  These might be thought of as a withdrawl of a job offfer by an employer, or declining to continue in the future a particular labor exchange arrangement that both the employer and the employee had previously agreed to, for some earlier period of time. 

As a side note, the reverse is also true.  The employee is quite free to terminate their labor exchange relationship/agreement with the employer, at any time, under US law in all 50 states.  This is called a "resignation" or "quitting" in ordinary US vernacular English.

So, no, the term layoff is not exclusively limited to the case where some particular "job" is eliminated, at least not in the US, in California, Texas and Florida, and in a number of other states with which I am familiar.

I'm trying to be helpful here and give a global view to a word that no doubt may be more narrowly used in some regions/countries/legal regimes than it is in others, even in places were business is conducted in English. 

[George CA]

So 10 percent was overblown, it was five percent of the work force giving their pink slips. For a 3,000 employee company, that's still a lot of people working there who were not up to standard. A bit scary for a rocket company. One mistake and kaboom!

[ey]

There is a very strong stigma associated with being "fired". It usually means the person in question did something egregiously wrong. Having a "layoff" of underperforming individuals allows a company to let go of employees without the stigma and with severance pay.

And under-performing doesn't mean bad. If you set a really high bar, then even very talented people might not meet that standard; or maybe their skills just don't quite match up with the project your company is focused on.

It's not all roses; we don't know the details of whether the people were informed that they needed to improve (which can be disheartening in its own right). The "hire young, burn out, and discard" culture at tech startups (SpaceX included) is questionable at times, despite there being no shortage of candidates going into these types of jobs well aware of the stories (if not the magnitude).

But it's also the willingness to make potentially unpopular decisions that drives the innovative spirit at startups. Large companies often have the opposite problem where they accumulate significant dead weight (underperforming employees) and don't let them go until there's serious problems with the company as a whole. In a lot of cases, the problem becomes severe enough that the company just decides to let X% of employees go, regardless of whether those X% people were truly underperforming; this can do terrible things to morale and make it difficult for the remaining people to do their jobs.

[Owlon]

Elon Musk founded the company with his own money, and money from investors that knew what they were getting into with the Mars dream. If he wants to fire his whole staff and develop a billion-dollar blender, ultimately, that is his decision to make. If he just wants to fire (or "lay off") a subset of the staff each year due to performance-based reviews while focusing on the company's explicitly stated goal of colonizing Mars, that's also fine.

From the about SpaceX page on their website:

SpaceX designs, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets.

The company was founded with Mars colonization in mind. They aren't there to fill "actual market needs," that's just a necessary stepping stone along their path to Mars. You can't fault them for eliminating (even as they continue to expand) a small fraction of the 3000+ jobs created in doing what they set out to do.

[Hauerg]

Wish they could fire Elon for "under performance", but hey, he legally owns it so he is going to take the credit for the company's successes ( and the press will be kissing his ass saying "he's IRON MAN for REAL!!") and externalize the failures in the form of layoffs. And, there's little to nothing that can be done about it. In some ways, I think a publicly listed company would be better - they'd steer the company to launching on time and towards actual market needs instead of pursuing Saturn-V clone Mars fantasies.

To me, as much as I like science fiction and #human2mars....that's irresponsible. Those workers at SpaceX work insane hours and seem to be passionate about it (like the Apple cult) and he's gambling with a lot of people's futures that don't have his wealth to fall back on, people who have student debt, mortgages, kids to educate, healthcare to pay for and a billion other things. Forgive me from being the down to Earth party pooper on a space forum!

Listed companies tend to fire people JUST TO PLEASE THE INVESTORS.
(I work at one.)

[Chris Bergin]

End of thread.

[Lar]

... A lot of stuff removed, even though this thread is locked.