SpaceX plans to lay off 10 per cent of its workforce

SpaceX currently has more than 6,000 employees in its workforce - soon to be reduced by around 600

Elon Musk's rocket company SpaceX is planning to cut about 10 per cent of its workforce.

The cuts were cited in an email to staff by the company's president, Gwynne Shotwell, and revealed in a report in the Los Angeles Times. "This was a very difficult but necessary decision," Shotwell wrote in the email.

Space Exploration Technologies Corporation - SpaceX - currently employs more than 6,000 workers. According to Shotwell, SpaceX faces "extraordinarily difficult challenges ahead", making it necessary to "part ways" with some of its employees.

SpaceX must become a leaner company

"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," Shotwell stated in the email.

"Either of these developments, even when attempted separately, have bankrupted other organisations. This means we must part ways with some talented and hardworking members of our team."

However, this is not the first time for SpaceX to lay off some of its workers. In June, seven members of the senior management team were reportedly fired over disagreements about the speed of work on the development of Starlink satellites. SpaceX's Starlink program is in a race with OneWeb and Telesat to be the first to provide new satellite-based internet service to customers.

We must part ways with some talented and hardworking members of our team

Also in June, Musk's Tesla Company announced cuts amounting to nine per cent of its workforce, which was said to be part of an organisational restructuring intended to reduce costs and increase profits for the company.

According to a report published last month in The Wall Street Journal, SpaceX is working to raise $500 million in funding, in terms that would value the company at $30.5 billion. Last week, the company revealed in a regulatory filing that it had sold $273 million in equity so far.

SpaceX earns most of its revenue by launching private and national security satellites, on top of two contracts it has with NASA. The space agency offered a multi-billion-dollar contract to SpaceX for delivering cargo to the International Space Station (ISS).

The second contract, worth $2.6 billion, was awarded to develop the Crew Dragon capsule that will eventually take US astronauts to the ISS. The company is working towards the first unmanned flight of the capsule next month.