Sierra Space is laying off several hundred employees and contractors to focus on its Dream Chaster spaceplane.
The cuts included roughly 165 employees and an undisclosed number of contractors.
Those affected will receive two weeks of paid non-working notice, four weeks of severance pay, and continued health care benefits through the end of the year.
Sierra Space, headquartered in Colorado, recently shipped the first Dream Chaser, Tenacity, to NASA’s Armstrong facility in Ohio for pre-launch testing.
The company conducted a surge in hiring earlier this year to complete work on the Tenacity spacecraft.
A spokesperson said Sierra Space is now realigning its focus on the operational phase of Dream Chaser’s maiden mission and classified national security projects.
The staff reduction coincides with Sierra Space’s plans to add nearly 150 employees with security clearances from Sierra Nevada Corp, its parent company.
This aims to create a specialized national security space team working on classified contracts.
The company clarified this strategic move is part of its broader realignment strategy.
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Sierra Space recently experienced departures at the executive level.
COO Jeff Babione retiring and Senior Vice President of Space Destinations Neeraj Gupta left the firm.
The company said these departures are unrelated to the workforce reduction.
Sierra Space raised nearly $300 million at a valuation of $5.3 billion just two months ago.