Virgin Galactic said on Wednesday that it will be pausing spaceflight operations for the upcoming year in order to concentrate resources on creating its next-generation Delta-class spacecraft.
Virgin Galactic, the space tourism company, announced in its third-quarter results that, despite having operated its VSS Unity spacecraft on a monthly basis since June, it will now operate it at a quarter rate. After that, it will pause operations “in mid-2024” to concentrate on the final assembly of new Delta ships.
About 185 workers, or roughly 18% of Virgin Galactic’s workforce, were let go on Tuesday in an effort to “reduce its costs and strategically realign its resources.” With this reduction, Virgin Galactic now employs 840 people overall, and it is anticipated that the company will save roughly $25 million annually in costs.
Analysts surveyed by LSEG, formerly known as Refinish, estimated that the space tourism company would lose 43 cents per share, but instead posted a net loss of $104.6 million, or 28 cents per share.
Revenue for Virgin Galactic increased to $1.7 million in the quarter from $767,000 the year before. Virgin Galactic successfully completed its fifth commercial spaceflight earlier this month.
Following hours, Virgin Galactic’s stock increased 8% from its closing price of $1.56 per share. The stock has dropped 55% so far this year.
At the end of the quarter, Virgin Galactic had $1.1 billion in cash and securities.
The company has been investing a lot of money to add more spacecraft to its fleet than the one it currently has, the VSS Unity. Virgin Galactic is working on improving the weekly rate of flight for its Delta-class spacecraft. By mid-2024, the company hopes to start production of Delta at a new facility in Phoenix.
Virgin Galactic CEO Michael Col glazier stated in a statement, “We forecast having sufficient capital to bring our first two Delta ships into service and achieve positive cash flow in 2026.”
