Virgin Galactic, the pioneering space tourism company, released its third-quarter earnings report, accompanied by strategic steps aimed at focusing on the development of the next-generation suborbital vehicle, known as Delta Class spaceships. This comes as part of an effort to position the company at the forefront of the evolving space industry.
As part of this shift, Virgin Galactic has made the decision to reduce its workforce in order to cut costs and realign its resources. On Tuesday, it announced that it would be laying off around 185 employees, which comes out to about 18% of its workforce. While such decisions are never taken lightly, they are seen as a necessary step to reallocate resources toward the ambitious Delta Class project. Virgin Galactic expects that the layoff will save the company around $25 million annually.
The new Delta Class vehicles are “intended to fly more frequently and at a lower cost than its existing SpaceShipTwo suborbital vehicle, VSS Unity,” according to SpaceNews. These spaceships represent a significant leap forward in suborbital technology, aiming to enhance the overall spaceflight experience.
However, according to CEO Michael Colglazier, “uncertainty has grown in the capital markets” due to geopolitical events and high interest rates, which “makes near-term access to capital much less favorable.” This led to the difficult cost-cutting decisions Virgin Galactic had to make.
In a memo to employees, Colglazier said, “The Delta ships are powerful economic engines. To bring them into service, we need to extend our strong financial position and reduce our reliance on unpredictable capital markets. We will accomplish this, but it requires us to redirect our resources toward the Delta ships while streamlining and reducing our work outside of the Delta program.”
The company shared its third-quarter financial results on Wednesday, and in the statement, Colglazier stated, “With our third quarter cash and marketable securities position of approximately $1.1 billion, we forecast having sufficient capital to bring our first two Delta ships into service and achieve positive cash flow in 2026.”
Virgin Galactic’s Q3 earnings report and the restructuring efforts signal the company’s commitment to advancing space tourism technology. While challenges persist, the company’s dedication to innovation underscores its determination to make space tourism an accessible and exciting reality.