Astra Layoffs Hit as the Space Company Faces a Black Hole of Financial Trouble
Key takeaways
- Space engineering company Astra is laying off 70 staff and reallocating 50 more to new departments
- Estimated earnings revealed massive losses as the company looks to bring in money
- Astra shares have plunged 17% in the last five days
Space engineering start-up Astra has announced it’s laying off 25% of its workforce as the company desperately tries to crawl out of the financial hole it finds itself in. The company’s second-quarter earnings beat reflected more woes, though the share price wasn’t really impacted. Here’s the latest.
Take your investment to the moon with Q.ai’s Emerging Tech Kit. It’s like boarding a space shuttle for a journey through the nebula of tech stocks and ETFs, all directed by an AI commander that scans the market, predicts the superstars and shifts your portfolio’s gravity to help you reach new investment heights.
Download Q.ai today for access to AI-powered investment strategies.
What’s happening at Astra?
Commercial spaceflight company Astra is set to reduce its headcount by 25%, resulting in 70 employees lost. Astra is also reallocating 50 workers from the rocket development program to its space products unit. The layoffs are set to save the company roughly $4 million in quarterly cost savings.
Another substantial step the start-up has taken is to raise $10.8 million in net proceeds by selling its debt to High Trail Capital. Astra is set to fulfill 278 spacecraft engine orders the company has in the pipeline, worth roughly $77 million, with most of these delivered by the end of 2024.
It’s not been smooth sailing for Astra — last year, its Rocket 3.3 mission exploded mid-launch, and the company quickly moved on to the Rocket 4.0 system design. “We are intensely focused on delivering on our commitments to our customers, which includes ensuring we have sufficient resources and an adequate financial runway to execute on our near-term opportunities,” CEO Chris Kemp said in a statement.
How did Astra’s second quarter results shape up?
The picture goes from bad to worse in the company’s preliminary Q2 results. Astra expects it’s made $1 million or less in revenue, with a net loss of $13 million to $15 million. The silver lining is that it has remaining expected cash and securities of roughly $26 million.
Astra is desperately trying to raise cash. The company announced its intention last month to raise $65 million through selling stock and has hired PJT Partners to bring fresh ideas on raising funds.
Astra’s share price has declined 21% this year, with 17% of that fall arising from the last five days.
The bottom line
A string of bad news has left Astra fighting for its life. It’s looking for a cash injection — and fast — but has hundreds of orders it still needs to deliver. The company is likely looking for a Hail Mary, and investors will be watching with interest to see if Astra can turn this around.
Blast off into the tech investment world with Q.ai’s Emerging Tech Kit. It’s your space cruiser through the uncharted sectors of tech stocks and ETFs, piloted by an AI that operates like a cosmic telescope. By scanning the data, forecasting the supernova assets and aligning your holdings, AI can help your investment boldly go where few portfolios have gone before.
Download Q.ai today for access to AI-powered investment strategies.
