Virgin Galactic Lays off Employees
Parking lots nearly completely empty at Mojave spaceport
An empty parking lot outside of a Virgin Galactic building at the Mojave Air and Space Port at Rutan Field in California. (Credit: Douglas Messier)
Update: Virgin Galactic said it is laying off 185 employees, which is approximately 18% percent of its workforce. The company will have 840 fulltime employees after the layoffs. Further, Virgin Galactic sent everyone home on Tuesday, saying they would call people through Thursday to inform them of employment status through working hours on Thursday. So, we won’t know until after then how many people in Mojave were laid off.
Virgin Galactic (NYSE: SPCE) announced a major layoff on Tuesday on the day before announcing third quarter results. The company’s stock rose 3 percent on Tuesday to close at $1.74.
Parking lots outside of Virgin Galactic’s facilities at the Mojave Air and Space Port at Rutan Field in California were all but empty on Tuesday afternoon. There were 10 cars outside of the company’s main FAITH hangar, and two automobiles outside of a production building located in a different part of the spaceport.
In a memorandum to staff, CEO Michael Colgalizer said the cuts were necessary so the company could focus resources on a new set of “Delta class” SpaceShipTwo suborbital vehicles that are designed to enter commercial service in 2026.
“To profitably scale our business, we must first invest upfront capital to create a fleet of ships based on a standardized production model — the Delta Class ships,” Colglazier wrote. “At the same time, it has been imperative for us to demonstrate the value and potential of our product by bringing our initial ships, Unity and Eve, into commercial service. Both of these initiatives consume substantial resources, and both have been critical to our company. We have successfully advanced both of these important efforts in parallel, and we have been able to support our funding needs along the way with access to capital markets.”
Virgin Galactic’s FAITH facility with a nearly empty parking lot on Tuesday, Nov. 7. (Credit: Douglas Messier)
Colglazier did not disclose how many employees are being laid off. The company said it would reveal more details during a third-quarter earnings call scheduled for after markets close on Wednesday, Nov. 8.
VSS Unity is Virgin Galactic’s only functioning SpaceShipTwo. It is capable of carrying four passengers on suborbital trips on a monthly basis. The vehicle is air launched from WhiteKnightTwo VMS Eve on flights originating from Spaceport America in
The Delta-class ships, which are being built at a facility in Mesa, Ariz., will be capable of carrying six passengers and flying on a weekly basis. They are due to begin flight tests in 2025 and begin commercial service the following year.
In late September, London-based investor Andy Shovel published a petition on Change.org called for Colglazier to significantly cut cost amid growing losses and a sinking stock price. The petition garnered 673 signatures.
“We want to submit a heartfelt plea, for you and the leadership team to cut opex costs and thus lower the cash-burn. At the time of writing, VG’s share-price is $1.7, down c70% from June this year. In spite of the c$900m on the balance sheet, there is a very present danger that the price could keep falling until the company is delisted this or next year,” Shovel wrote.
“Ordinarily, this would not be an existential risk for a business, but VG needs at least $1bn (maybe $2bn on a bad day) to commission the delta fleet and reach profitability; without ongoing access to the public market, optionality for fundraising routes will be severely limited,” he added.
Virgin Galactic’s press release is below.
Virgin Galactic Provides Business Update
ORANGE COUNTY, Calif.- -- Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or the “Company”), notified all employees today, Tuesday, November 7 of a strategic realignment of the Company’s resources and a related workforce reduction to support the production of its Delta Class spaceships.
Virgin Galactic’s senior leadership will share additional details on the Company’s third-quarter earnings call, scheduled for 2:00 PM PT Wednesday, November 8, 2023.
Please refer to internal memo below sent to all employees at Virgin Galactic from CEO, Michael Colglazier.
About Virgin Galactic
Virgin Galactic is an aerospace and space travel company, pioneering human spaceflight for private individuals and researchers with its advanced air and space vehicles. It has developed a spaceflight system designed to connect the world to the love, wonder and awe created by space travel and to offer customers a transformative experience. You can find more information at
https://www.virgingalactic.com/
The following email was sent to all Virgin Galactic employees today, November 7, 2023 by Virgin Galactic CEO Michael Colglazier.
Hi Team,
We spoke in our town halls last month about the success of our recent spaceflights and the incredible experience that is being delivered to our early astronauts. We also spoke about the need to focus our resources on the work that will create long-term financial health and success for our company. As we discussed, our Delta Class ships will drive the capacity, growth, and profitability of our company, and we must focus our efforts on bringing these ships into service.
I’m writing today to share news that we will be streamlining our work outside of the Delta program, and we will be making related reductions in both staff and expenses. This is a difficult decision, as reductions in our workforce have direct and indirect impacts on our team, our co-workers, and our friends. I want to share how I arrived at this decision, what the process will be for those who are leaving, and what happens next.
Why are we making this decision?
To profitably scale our business, we must first invest upfront capital to create a fleet of ships based on a standardized production model — the Delta Class ships. At the same time, it has been imperative for us to demonstrate the value and potential of our product by bringing our initial ships, Unity and Eve, into commercial service. Both of these initiatives consume substantial resources, and both have been critical to our company. We have successfully advanced both of these important efforts in parallel, and we have been able to support our funding needs along the way with access to capital markets.
Recently, however, uncertainty has grown in the capital markets. Interest rates remain high, which adds pressure to companies who are investing today for profits that will come in the future. Geopolitical unrest continues to expand, and the combination of these factors makes near-term access to capital much less favorable. We are going to succeed in this environment by focusing our full company efforts on the safe, efficient, and successful completion of our Delta program that will allow us to create positive cash flow.
The Delta ships are powerful economic engines. To bring them into service, we need to extend our strong financial position and reduce our reliance on unpredictable capital markets. We will accomplish this, but it requires us to redirect our resources toward the Delta ships while streamlining and reducing our work outside of the Delta program.
By taking these actions now, we ensure Virgin Galactic continues to have access to the funding needed to deliver on our mission — bringing the wonder of space to both our existing customers and to the generations of customers who will follow.
What is the process for letting me know if I am being impacted?
Beginning this afternoon and extending through Thursday, we will be making phone calls to each of you to confirm your employment status. It will take a bit longer to reach everyone vs. simply sending an email, but we want to have personal discussions as much as possible. As a company, we will be working from home during the remainder of this week, as on-site work locations will be unavailable through the end of the week.
What happens next?
These actions, while necessary, come with great impact. Our teammates who will be leaving Virgin Galactic are talented, purpose-driven, and they excel in their professions… and it is deeply unfortunate to part ways with some of our co-workers and friends.
To those who will be leaving, I am very sorry these changes will impact you so directly. I want to thank each of you for the talent, passion, and perseverance you have put into our company each day — we became a commercial Spaceline this year thanks to your efforts, and I am grateful to you for the work you have done to advance the dream of opening access to space for generations to come.
To the larger teams who are not directly impacted, I know these changes can be unsettling and disruptive. Our friends and co-workers who are leaving are part of Virgin Galactic’s story and success, and while they will become a part of our history, we will miss them in our day to day interactions.
This is a tough moment… but these actions are being taken to remove reliance on unpredictable capital markets, and these actions protect our ability to succeed as we build and lead our industry through the long term. I ask for your understanding and continued engagement as we adjust our operating focus and move forward.
We will be sharing more about the plans that will take us successfully forward during our earnings call tomorrow afternoon. Next week, we will gather both in larger groups and smaller teams to answer your questions about program plans, share company economics in greater detail, and align our focus towards profitably scaling up our spaceship fleet for a global audience.
Michael