Astra, the space company known for its rocket launches and spacecraft production, has announced significant workforce reductions. Since the beginning of the quarter, the company has laid off 25% of its employees and plans to reallocate 50 engineers and manufacturing staff away from its launch business in order to focus on spacecraft production.
This reshuffling of personnel is expected to cause delays in the testing of Astra’s under-development Rocket 4 and Launch System 2.0. The affected employees were primarily from the launch, sales, administration, and “shared services” departments. These workforce reductions are aimed at saving the company over $4 million per quarter starting in the fourth quarter of this year.
Astra is facing financial challenges and is looking to reduce operating expenses while bolstering its spacecraft engine business, which currently offers the most immediate revenue potential. The company acquired propulsion developer Apollo Fusion when it went public in July 2021, and the spacecraft engine technology from this acquisition has already garnered 278 committed orders, amounting to around $77 million in contracts upon delivery.
“We are intensely focused on delivering on our commitments to our customers, which includes ensuring we have sufficient resources and an adequate financial runway to execute on our near-term opportunities,” said Chris Kemp, CEO and founder of Astra.
In addition to the workforce reductions, Astra has enlisted investment bank PJT Partners as a financial advisor to explore avenues for raising capital. The company is considering potential strategic investments in its spacecraft engine business to strengthen its balance sheet. Astra recently secured $10.8 million in a debt sale to investment group High Trail Capital.
Preliminary financial results for the second quarter indicate that Astra expects revenues between $0.5 million and $1 million. The company also has a cash on hand of approximately $26 million to $26.5 million.
This is not the first time that Astra has implemented significant layoffs. Last November, the company announced a workforce reduction of 16% as it sought to focus on its launch and spacecraft engine operations.
Astra’s latest restructuring efforts highlight the company’s commitment to navigating its financial challenges while prioritizing its spacecraft engine business. With significant orders in the pipeline, Astra aims to secure its position in the space industry and continue delivering on its customer commitments.