SEATTLE — Astra Space announced Aug. 4 it has laid off a quarter of its workforce and reassigned others from launch vehicle to satellite propulsion development as its cash reserves dwindle.
In a series of statements, the company said it was making a “strategic reallocation of its workforce,” moving 50 engineers from development of its new Rocket 4 vehicle to production of its Astra Spacecraft Engine, while also laying off about 70 employees to reduce costs.
“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,” Chris Kemp, chief executive of Astra, said in a statement announcing the moves.
The layoffs and reassignments, Astra said, will delay work on Rocket 4, but it did not estimate by how much. The company said in March that it was on track to carry out a first test flight of the larger rocket before the end of the year.
“The Company’s ability to conduct paid commercial launches in 2024 and beyond will depend on the ultimate timing and success of the initial test launches which will in turn depend on the resources that the Company is able to devote to Launch Systems development in the coming quarters,” Astra stated in a filing with the Securities and Exchange Commission about the restructuring.
In a May 15 earnings call, Kemp said Astra had no plans to end launch vehicle development in order to focus its remaining resources on spacecraft propulsion. “We believe in both of these businesses,” he said then.
Astra has announced 278 orders to date of the Astra Spacecraft Engine, an electric thruster based on technology it acquired from startup Apollo Fusion in 2021. Those orders have an overall value of $77 million, and the company said it expects a “substantial majority” of those engines will be delivered by the end of 2024.
However, the company has realized little revenue from those thrusters so far. Astra reported no revenue in the first quarter of 2023 and provisionally expects between $500,000 and $1 million in revenue in the second quarter. The company is scheduled to publish its second-quarter financials on Aug. 14.
That lack of revenue is contributing to its cash burn. The company said it expects to report finishing the second quarter with $26 million to $26.5 million in cash and equivalents on hand. That is less than the $30 million to $33 million it forecasted in May, which the company blamed on delays on collecting receivables from unspecified government work and delays in receiving proceeds of a tax credit.
Astra announced July 10 it would seek to sell up to $65 million in stock in an “at-the-market” offering, where shares are sold at the going market rate. Astra also stated then it would conduct a 1-for-15 reverse stock split in a bid to raise its stock price above $1 a share and avoid delisting from the Nasdaq exchange.
The company separately announced Aug. 4 that it has secured a $12.5 million loan from an unnamed institutional investor. The company said the net proceeds of the loan, $10.8 million after fees and expenses, will go towards working capital and general company expenses.
While Astra still plans to release earnings on Aug. 14, the company said it will hold a separate conference call Aug. 7 to “discuss recent events.”
Industry layoffs
The Astra layoffs are just the latest involving space startups in recent months as they have struggled with finances and an investment climate that has cooled significantly in the last year.
On Aug. 1, Earth imaging company Planet said it was laying off 117 employees, about 10% of its workforce. The company blamed the layoffs on an expansion of the company after it went public in late 2021 that resulted in “increased cost and complexity,” said Will Marshall, chief executive of Planet, in a statement. He also cited changes in the broader economy.
“For both of these reasons, we are making changes to prioritize our attention on the highest ROI [return on investment] opportunities for our business and mission, while reinforcing our path to profitability,” he stated.
Other space industry companies that have announced layoffs recently include engine developer Ursa Major Technologies, which laid off about a quarter of its 250 employees in June, and spacecraft propulsion company Benchmark Space Systems, which laid off 15% of its 118 workers in late June, shortly before raising a $33 million Series B round.
Virgin Orbit laid off 675 employees, 85% of its workforce, in late March, shortly before filing for Chapter 11 bankruptcy. The company later liquidated its assets at auction and laid off its remaining employees.
