Elon Musk’s SpaceX will lay off 10 percent from its total workforce of about 6,000, the company announced today, according to Gizmodo.

SpaceX carried out a record number of launches in 2018, but they say the move is necessary to prepare for “extraordinarily difficult challenges ahead.”

Musk says the company will perform a “hopper test” of their Mars rocket prototype as soon as next month. The company is expecting to shoulder costs totaling billions of dollars for the production of the Mars craft and its rockets. In the past, the company had outlined a timeline for its Mars program including an unmanned trip in 2022 followed by a crewed mission in 2024.

“To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based Internet, SpaceX must become a leaner company. Either of these developments, even when attempted separately, have bankrupted other organizations,” the company said in a statement. “This means we must part ways with some talented and hardworking members of our team. We are grateful for everything they have accomplished and their commitment to SpaceX’s mission.”

According to a filing with the Securities and Exchange Commission, SpaceX sold $230 million worth of shares to eight investors earlier this month, out of a total number of shares it is putting on sale worth $500 million.

The company is worth about $31 billion, according to the LA Times.

SpaceX President Gwynn Shotwell has said the company has been profitable for “many years,” despite a “tough” year in 2016 with the explosion of a Falcon 9 rocket on its launchpad.

The company earns most of its revenue from launches of commercial satellites, as well as from two recent contracts for NASA. Last month, SpaceX carried out its first national security launch, of a rocket carrying a military navigation satellite.

In June, Musk fired at least seven employees in senior management following disagreements on the pace of development and testing for their Starlink satellite project, which is competing with OneWeb and TeleSat to bring a new satellite internet service to the market.

That same month, Musk’s electric car company Tesla also announced layoffs of nine percent of its staff, as a cost reduction effort.

Employees will be offered at least eight weeks of pay, as well as career coaching and assistance with resume building and job hunting.

 

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