Rocketplane Inc., the Oklahoma City-based company behind the K-1 reusable rocket and XP suborbital space plane, has shed about a fifth of its work force since the first of the year.

Among the departures were two

senior managers:

David Urie, chief technical officer, and Robert Seto,

vice president and chief of staff


executives said the 17 departures were

almost entirely on

the suborbital side of the company and were partially offset by several new hires on the K-1 side.

Today Rocketplane

employs 39 people between the parent company and its

two subsidiaries – Rocketplane Global and RocketplaneKistler

only nine fewer than at the beginning of the year.

But while the RocketplaneKistler payroll has grown to 24 employees in the past six months, Rocketplane Global and the parent company are down to a staff of 15 – less than half their

previous combined work force.

President Randy Brinkley said the layoffs were one of “several near-term cost-reduction initiatives” the company was forced to undertake this year while it completes financing for the XP, a four-seat jet-fighter-sized vehicle designed to carry passengers to the edge of space. He said the layoffs were only temporary and that some of the employees are standing

by to come back when the company’s financial situation improves.

“The XP program will be fully restarted following full funding,” he said.

, a former engineer with Canada’s Bombardier Aerospace,


hired by Rocketplane for his experience designing the Learjet upon which the XP is based. He

left Rocketplane this spring to take a job with Ball Aerospace in the Huntsville, Ala., office it opened to compete for

the Ares 1 Instrument Unit contract NASA expects to award later this year.

Ball spokeswoman Carolyn Townsend said July 2 that Seto declined to be interviewed.

, a 30-year veteran of Lockheed Martin Skunk Works in Palmdale, Calif., told Space News he was laid off in May along with about a dozen other employees


After being asked by Rocketplane to work at no salary, Urie

agreed to forfeit a regular paycheck in exchange for a share of the company. The California resident also wanted to continue receiving a housing allowance

for living and working in Oklahoma City, where the company’s small technical work force is based.

said he and Rocketplane had agreed on a new employment

package this spring but the deal was withdrawn as the company prepared to embark on a new round of financing.

“That was sort of the end of any such discussion,” Urie said.

praised the small technical team he left behind to work on the XP.

“The XP design is in excellent shape,” Urie said. “All they lack is the funding to proceed.”

executives are also busy looking for money to complete the K-1 reusable launcher. The company missed a May deadline for showing NASA that it had secured the $500 million in private financing it needs to finish the K-1 and conduct a series of space station-bound flight demonstrations

by 2010. The demo flights are promised under the Commercial Orbital Transportation Services (COTS) agreement it signed with the U.S. space agency last August.

To date, RocketplaneKistler has received $32 million of the $207 million potentially available

under COTS if the company

completes the K-1 and shows that the vehicle

is capable of delivering cargo to the international space station. In order to continue receiving financial assistance from NASA for the K-1

, RocketplaneKistler must show that it is making technical and financial progress.

Brinkley said RocketplaneKistler continues to make technical progress with the aid of bridge loans from its existing investors. He said he expects to complete full financing of the K-1 by the end of July, which would put

the company some seven months ahead of its originally promised schedule.

Brinkley said that only one of Rocketplane’s 17 personnel departures was on the K-1 side of the business – an assistant scheduler who left to take another job. He said

Kistler has added seven people to its payroll this year and will continue to grow as vehicle production quickly ramps up.

While Brinkley is focused on raising money for the K-1, George French, Rocketplane’s chairman and chief executive, is heading up the XP financing effort.

French said July 3 he was making progress lining up investors and expected to have XP funding in place late this year or early next year. “Sometimes in order to take two steps forward you have to take one step backwards and I think that’s the position we are in right now,” French said. “And soon

we will be taking two steps forward.”

He declined to say when he thought the XP would be ready to enter commercial service.