COLORADO SPRINGS, Colo. (Reuters) - United Launch Alliance plans to cut up to 875 jobs, or about one-quarter of its workforce, before the end of 2017 to better compete against rivals bankrolled by billionaire entrepreneurs including Elon Musk and Jeff Bezos, ULA’s chief executive said on Thursday.
ULA, a partnership of Lockheed Martin Corp (LMT.N) and Boeing Co (BA.N), expects a first round of 375 job cuts to be accomplished this year, mostly through voluntary layoffs. In an interview with Reuters, ULA CEO Tory Bruno said another 400 to 500 employees would be cut by the end of 2017.
“We’re in the process of transforming our company,” Bruno said.
For example, ULA is ending one of the two independent space transportation systems required by the U.S. Air Force, Bruno said. ULA used to be responsible for assuring that U.S. government agencies had at least two ways to send payloads into space. “With this new environment where we have multiple providers, I don’t have to bear that burden by myself anymore,” Bruno said.
Last year, Musk’s Space Exploration Technologies’ Falcon rocket was certified to fly military payloads, leaving ULA free to end its pricey Delta 4 rocket line.
Air Force Secretary Deborah James told Reuters that SpaceX could win a contract to launch a GPS military satellite in coming months, breaking ULA’s monopoly.
ULA is working on a next-generation rocket called Vulcan that will be less expensive to manufacture and fly than its current Atlas booster.
“Our prices are coming down every day,” Bruno said. “We now talk about a $99 million launch service.”
ULA does not plan to offer both Atlas and Vulcan rockets, an option raised by Aerojet Rocketdyne (AJRD.N) Holdings Inc during a press conference at the symposium on Tuesday. Aerojet hopes to displace Bezos’ Blue Origin as ULA’s intended supplier for Vulcan rocket engines.
“Our business strategy is to simplify the product offering because that simplifies that cost structure that goes with it,” Bruno said.
Reporting by Irene Klotz; Editing by Jeffrey Benkoe and Steve Orlofsky