WASHINGTON — Sierra Space laid off 165 employees who had been working on its Dream Chaser vehicle as part of what the company described as efforts to realign its workforce to other projects.

A company spokesperson confirmed Nov. 17 that it laid off 165 people who had been working to assemble the first Dream Chaser vehicle, named Tenacity. The company announced Nov. 2 that it had completed Tenacity and was ready to ship it to NASA’s Armstrong Test Facility in Ohio for environmental tests.

Sierra Space said it had performed “surge hiring” in the last six to eight months to complete Tenacity, including handling work that the company decided to bring in-house. With that work completed, the company says it is moving its focus to preparing Dream Chaser for launch on its first mission, scheduled for as soon as spring 2024.

The company also let go of some contractors who had supported assembly of Dream Chaser, although it declined to state how many were affected. CNBC, which first reported the layoffs, said hundreds of people overall, both employees and contractors were let go.

The company described the layoffs as a “realignment” of company resources. While it was laying off people working on Dream Chaser, it is in the process of bringing on 150 people from Sierra Nevada Corporation, from which Sierra Space was spun off in 2021, with security clearances. Those people will work on classified projects as the company builds up a national security business unit.

While best known for Dream Chaser, a vehicle designing to carry cargo and, later, crew to the International Space Station and future commercial space stations, Sierra Space has discussed doing more work in national security space. It established a National Security Advisory Group in 2022 and has discussed developing a version of Dream Chaser for unspecified military applications.

The company raised $290 million in a Series B round in September that valued the company at $5.3 billion. That funding is designed to accelerate work on future versions of Dream Chaser as well as inflatable modules it plans to use for commercial space stations.

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...