Virgin Galactic (NYSE:SPCE) shares climbed midday Thursday, amid plans announced Wednesday to pause spaceflight operations next year to focus resources on developing its next-generation Delta-class spacecraft.
Although Virgin Galactic has been flying commercial missions at a monthly rate since June, the space tourism company will reduce the rate its VSS Unity spacecraft is flying to a quarter rate, before pausing “in mid-2024” to focus resources on final assembly of new Delta ships, the company said in its third-quarter results.
Virgin Galactic laid off about 185 employees on Tuesday, or about 18% of its workforce, in order “to decrease its costs and strategically realign its resources.” The reduction brings Virgin Galactic’s total headcount to 840 employees and is expected to generate about $25 million in annual cost savings.
The space tourism company posted a net loss of $104.6 million, or 28 cents a share, compared with a loss of 43 cents a share expected, according to analysts surveyed by LSEG, formerly known as Refinitiv.
Virgin Galactic generated $1.7 million in revenue during the quarter – up from $767,000 a year prior. Earlier this month Virgin Galactic completed its fifth commercial spaceflight.
Virgin Galactic stock rose 46 cents, or 29.5%, to $2.02, in early Thursday trading from its close at $1.56 a share. The stock is down 55% year-to-date.