Struggling space company Astra is making significant changes to its operations, including cutting 25% of its workforce and restructuring its focus towards its spacecraft engine business. This decision will result in a delay in the progress of its small rocket development.

Workforce Reduction and Reallocation

Astra is reducing approximately 70 employees and reallocating 50 personnel from its rocket development program to its space products unit, which is responsible for building the company’s spacecraft engines.

Astra’s chairman and CEO, Chris Kemp, stated, “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.”

The workforce reductions are expected to save $4 million quarterly, starting in the fourth quarter. Astra currently holds 278 orders for spacecraft engines, valued at approximately $77 million in contracts. The company aims to fulfill a significant majority of these orders by the end of 2024.

Financial Update and Future Plans

In a separate filing, Astra announced that it raised $10.8 million in net proceeds from selling debt to investment group High Trail Capital.

Astra’s stock remained relatively unchanged in after-hours trading on Friday.

The company’s decision to prioritize its spacecraft engine business will impact the timing of future test launches. Astra had initially planned to launch its upgraded system, Rocket 4.0, by the end of this year. However, the company stated that the success of future launches depends on the resources allocated to launch systems development in the upcoming quarters.

Second-quarter Results and Capital Raising

Astra released preliminary second-quarter results, expecting revenue to be $1 million or less, with a net loss between $13 million and $15 million. The company’s cash and securities are estimated to be around $26 million. Finalized results for the second quarter will be reported on August 14.

To raise additional capital, Astra plans to conduct a reverse stock split at a 1 to 15 ratio and is seeking to raise up to $65 million through an “at the market” offering of common stock through Roth Capital. The company has also enlisted PJT Partners as a financial advisor to explore further capital-raising opportunities.