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Virgin Galactic Cuts 18% of Workforce, Pauses Spaceflights to Prioritize Production of Delta Class Spaceships

Layoffs expected to generate $25 million in annual savings as company redirects focus to Phoenix-based production facility and aims for profitability shortly after introducing new spaceship operations in 2026.

Overview

  • Virgin Galactic is laying off 185 employees, or 18% of its workforce, to save approximately $25 million a year and concentrate resources on the development and production of its next-generation Delta Class spaceships.
  • CEO Michael Colglazier sent an email to employees announcing the layoffs and explaining the decision as necessary in current economic conditions, with high interest rates and geopolitical unrest making near-term access to capital less favorable.
  • Delta Class spaceships are expected to be a significant driver for profitability and growth, and the plan is to focus the company's effort on bringing these new vehicles into service.
  • Virgin Galactic is set to open a factory in Phoenix, Arizona in 2024 for the production of Delta Class spaceships. These new spaceships, designed to carry six passengers, are expected to start operating flights in 2026 after testing in 2025.
  • The company also plans to pause its current spaceflight operations in mid-2024 to further direct funds and resources into spaceship production.