Sierra Space cancels hundreds in effort to launch Dream Chaser
A demonstration of the Dream Chaser spacecraft in orbit.
Sierra Space, one of the region’s most valuable private companies, laid off several hundred employees and contractors this week, CNBC has learned.
A Sierra Space spokeswoman confirmed the company will lay off about 165 workers Thursday, but declined to specify the number of contractors affected. Former Sierra Space employees told CNBC that the layoffs included a large number of contractors, with the cuts involving hundreds of workers in total.
The irresponsible workers received two weeks of paid non-work notice, as well as four weeks of severance pay and health care benefits by the end of the year. Sierra Space had about 2,000 employees before it reduced its workforce, a company spokeswoman said.
The Colorado-based company, recently valued at more than $5 billion, is pushing hard to fly the long-awaited first mission of its Dream Chaser spacecraft.
Sierra Space this week launched the first Dream Chaser, named Tenacity, for pre-launch testing at NASA’s Armstrong facility in Ohio. The layoffs began shortly thereafter, a Sierra Space spokesperson said, noting that the company increased hiring this year to complete work on the Tenacity spacecraft.
With Tenacity axed, a Sierra Space spokesperson said the company is restructuring to focus on the operational phase of Dream Chaser’s first mission, as well as scheduled national security work.
The final part of Sierra Space’s realignment includes the addition of nearly 150 employees with security clearances from Sierra Nevada Corp., the aerospace and defense contractor owned by Fatih and Eren Ozmen, whose company to spin space two years ago. A Sierra Space spokesperson said the company is creating a national security space team to work on several classified contracts.
Sierra Space recently lost a pair of senior executives to layoffs: COO Jeff Babione, who resigned, and Senior Vice President of Space Destinations Neeraj Gupta. The company said there was no connection between the proceedings.
Two months ago, Sierra raised just under $300 million at a $5.3 billion valuation.
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Dream Chaser has been in development for years with the goal of delivering cargo and eventually crew to low Earth orbit as a reusable vehicle. It resembles a miniaturized NASA Space Shuttle in appearance and is built to launch atop a traditional rocket and land on a runway like an airplane.
The first Dream Chaser launch was previously scheduled for late last year, but delays in the development of United Launch Alliance’s Vulcan rocket pushed that timeline back. Dream Chaser is scheduled to launch on ULA’s second Vulcan mission, with the first Vulcan launch targeted for December.
Dream Chaser has won NASA contracts to fly seven cargo missions to and from the International Space Station.