Astra Cuts Workforce and Shifts Focus to Spacecraft Engines
Struggling space company Astra is cutting 25% of its workforce, the company announced Friday, and restructuring to focus more on its spacecraft engine business, which will delay progress on the small rocket it has been developing.
Workforce Reduction and Restructuring
Astra is cutting about 70 employees, as well as reallocating about 50 personnel from its rocket development program over to its space products unit, which builds the company’s spacecraft engines.
According to Astra chairman and CEO Chris Kemp, the company is committed to delivering on its customer commitments and ensuring sufficient resources and financial stability to execute on near-term opportunities.
Cost Savings and Contract Deliveries
The workforce reductions are expected to result in $4 million in quarterly cost savings, starting in the fourth quarter. Astra currently has 278 total orders for spacecraft engines, worth about $77 million, and expects to deliver on a substantial majority of those orders by the end of 2024.
Financial Update
In a separate filing, Astra announced raising $10.8 million in net proceeds from selling debt to investment group High Trail Capital. Astra’s stock remained relatively unchanged in after-hours trading on Friday.
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Impact on Rocket Launches
Astra’s focus on the spacecraft engine business will affect the timing of the company’s future test launches. The ability to conduct paid commercial launches in 2024 and beyond will depend on the timing and success of these initial test launches.
Second-Quarter Results and Financial Plans
Astra released preliminary second-quarter results, expecting revenue of $1 million or less, a net loss between $13 million and $15 million, and cash and securities amounting to about $26 million. The company plans to report finalized second-quarter results on August 14.
Astra has finalized plans for a reverse stock split and is seeking to raise up to $65 million through an “at the market” offering of common stock. The company has hired PJT Partners as a financial advisor to explore opportunities for raising additional capital.
