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.
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.
“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,” Astra chairman and CEO Chris Kemp said in a statement.
The workforce reductions are expected to result in $4 million in quarterly cost savings, beginning in the fourth quarter. Astra noted that it had 278 total orders for spacecraft engines, as of four months ago, worth about $77 million in contracts. It expects to deliver on “a substantial majority” of those orders by the end of 2024.
In a separate filing Friday, Astra said it raised $10.8 million in net proceeds from selling debt to investment group High Trail Capital.
Astra stock was little changed in after-hours trading Friday from its close at 38 cents a share.
Last year, Astra moved away from its Rocket 3.3 vehicle earlier than expected to focus on the next version, an upgraded system called Rocket 4.0, after its final Rocket 3.3 mission failed mid-launch. While the company was targeting a first launch of Rocket 4 by the end of this year, in a securities filing, Astra noted the prioritization of the spacecraft engine business “will affect the timing of the Company’s future test launches.”
“The Company’s ability to conduct paid commercial launches in 2024 and beyond will depend on the ultimate timing and success of the initial test launches which will in turn depend on the resources that the Company is able to devote to Launch Systems development in the coming quarters,” Astra warned.
The company also released preliminary second-quarter results. Astra expects it brought $1 million or less in revenue during the quarter, with a net loss between $13 million and $15 million, and a remaining amount of cash and securities of about $26 million. The company plans to report finalized second-quarter results Aug. 14.
Last month, Astra finalized plans to conduct a reverse stock split at a 1 to 15 ratio. It’s also seeking to raise up to $65 million through an “at the market” offering of common stock through Roth Capital and ended a prior agreement with B. Riley to sell up to $100 million in common stock that the company signed a year ago.
In Friday’s filing, Astra said it hired PJT Partners as a financial advisor, with the company “focused on thoughtfully pursuing opportunities to raise additional capital.”