Also, given that Falcon 9 is now essentially "done", I expect there probably is a fair bit of internal capacity that's accumulated during its development which can be cut. For example, SpaceX is famous for building a lot of components in house, but perhaps they'll move more to using subcontractors for Falcon 9 parts. That might free up money to spend on R&D. The challenge will be to become leaner and save money in the core launch business without compromising standards. It'll only take a couple of accidents to trash their reputation.
Down stream impact of how to cope with that loss is another factor. Fire your book keeper and does your remaining engineering team have to spend 10% of their time doing invoices and reconciling bank accounts?
On topic, probably just cutting out the fat (I'm sure most companies can fire 10% and a month later very few would notice the difference). But then, why not move them to R&D? I doubt SpaceX has cash problems to fire (more or less) essential workers.
10% usually means 10% to 40% of company productivity is affected shortterm. 10% leave, 5% wanted to get fired but didn't, 25% will think they are next and change how they work (some positive some negative).
It is usually a signal for top performers to start moving on. In this case the story is spacex is growing conflicts with the layoffs.
Moral is low and the office has been pretty damn quiet. Meanwhile we just raises earnings forecast today...
In certain circumstances, once the means of production are created [most of] the workers are no longer needed, but the means being privately held (by a narrow group of owners) means they alone can benefit going forward.
You can make a feast together and share it; or you can make a feast together, kick out most of the helpers and gorge yourself.
Capitalism says the second option is better because you get to have more.
In a system with healthy incentives, we might expect Option 1 to be the sensible capitalist equilibrium, because capital needs to be maintained and the builders/maintainers become the same people.
Don't forget that, in theory, the workers can become capitalists themselves if they aren't getting a good share of the benefits. In my view usually when they don't it is because of government interference (eg, the pre-Uber situation in taxis, or how regulation tends to entrench existing players).
As an example, someone who switches from working as a landscaper to running a landscaping business has switched from a worker role to a capitalist role — even though they likely spent less money doing so than a software engineer worker owns. Being a “capitalist” is defined by capitalizing ventures, not the mere volume of capital.
I would argue that the reason society has become so disequitable is that we’ve made it difficult to transition between worker and small capitalist — that is to say, that we’ve undermined small and lifestyle businesses.
No, capital expanding has social benefits in reducing consumer prices, which increases purchasing power.
I have the quarterly cycle. I find it extremely bad for both the society and companies when nobody takes the long term view.
"Early Friday, GM said 2018 EPS will exceed previous guidance of $5.80-$6.20. It also expects to surpass an earlier view of adjusted automotive free cash flow of $4 billion."
California WARN act applies to any site that has at least 70 employees and lays of at least 50. When this is triggered, the employer needs to provide at least 60 days notice.
Everyday the company is already risking that.
It only takes one. Risk to the company is much bigger when you’re building rockets than your typical software shop, too.
I’ve said it before and I’ll say it again. Always negotiate severance up front as part of any job offer, and consider 4-6 months as an absolute minimum for junior or mid-level employees, and at least 12 months of pay for senior employees. Simply turn down job offers when a company won’t offer this and take a longer time to find an offer at one of the (many) companies that will.
Most companies will negotiate severance with you but you have to ask and make it clear that in-writing severance details to serve as protection against unexpected unemployment from layoffs is a dealbreaker for you.
Most candidates won’t negotiate this, which is why most companies don’t have to offer it except to the few special case people that require it.
If we all, as candidates, unilaterally make it impossible to hire us without adequate severance, we’ll all be better off.. instead of just the minority of candidates who put forward the effort to negotiate it and aren’t afraid to turn down offers that don’t include defined severance agreements.
Have you put this into practice? It'd be a nice contingency to have in place but seems like it'd put a damper on the tone of the negotiations ("I'm already thinking about being let go and want to make it really expensive for you to do so").
But I gained a lot of experience regarding how to negotiate it and talk about it, and ultimately found that most companies are perfectly happy to negotiate it as part of the job offer.
That would still leave them with many thousands of redundant employees. Falcon 9 is done and the production is dropping due to reusability. Recently, they had a 3rd re-flight of the same core, which, coupled with the slowdown of the global launch market, means that in the next years they will need to produce a third to a half of the number of cores they used in 2017. The same for Merlin engines.
They basically fulfilled their mission and drastically reduced the cost of getting into orbit - which for the space industry is dominated by labor costs. Without a greatly increased demand, they can't justify keeping those people around.
And they can't roll all the Falcon production workforce towards BFR, Raptor and Starlink since those are still strongly R&D dominated projects and the skill set is incompatible. At the same time, they have hundreds of engineering positions open for those projects.
I would have put them on other Musk projects to keep them from going to the competition. SpaceX doesn't have a monopoly on low cost launch. The next place to figure out how to 3d print a tungsten titanium copper nickel chromium iron one piece rocket nozzle will also have that advantage.
He also said that he joined Tesla to help jump start the electric car revolution by a decade and his total asset liquidation in 2008 to support Tesla and SpaceX seems to support that this attitude is not just some PR move, but who knows for sure.
The same thing is used to train a talent pool in a vendor eco system, hire contractors to build demo apps and integrations, but cycle them out after every project. All those people can now put Tech X on their resume.
SpaceX definitely transformed the entire endeavor of space travel.
It's pretty clear Musk sees his for profit endeavors - Tesla, commercial and government launches, Starlink - as cash cows for a long term investment into something no one in the market is yet ready to finance. Until that changes and Mars becomes an interesting commercial proposition, Musk will ruthlessly pursue his business and leave nothing on the table, precisely to acquire the funds to bootstrap his vision.
Musk does seem to believe in occasionally "trimming the fat" when the numbers get tight. SpaceX did this exact thing in 2014, and Tesla has done it recently (and is now back over the headcount post-layoffs).
1: https://www.edd.ca.gov/jobs_and_training/Layoff_Services_WAR...
In large engineering organisations, laying off 10% makes no difference at all on anything apart from the ego of managers whose teams shrink.
On the topic, wasn't Jack Welsh/GE that popularised the idea of firing the bottom 10% every single year? Not saying that this is necessarily a good idea but that shows the amount of slack in large organisations.
Edit: In any big corp, there are usually many employees who act as "barriers" to others. Either because they feel secure enough in their job and don't really care about performing, or because they lost sight of why things are being done, and are focusing on bureaucracy and "processes" for the sake of those two things.
If the decimations have been going on for some time, I'd expect them to reliably hit low-performers, but only because the obvious low performers were hired as sacrificial lambs in the first place, which puts the whole exercise deep in "cobra effect" territory.
https://en.wikipedia.org/wiki/Lucky_Starr_and_the_Big_Sun_of...
This all goes up for grabs when the treaties expire in a few decades and it's presently an environmental issue to try and get them resigned rather than have an oil rush there.