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SpaceX shook up its satellite internet scheme by firing seven managers

Reuters/Brian Snyder
  • Tim Fernholz
By Tim Fernholz

Senior reporter

This article is more than 2 years old.

When Elon Musk wasn’t happy with the pace of construction on his world-spanning internet constellation, he did what he normally does: Fire people.

Reuters reports that Musk in June let go seven senior leaders at a SpaceX division in Redmond, Washington. The team there is building a network of satellites called Starlink to provide broadband internet to users on Earth.

Anonymous sources told Reuters that the division struggled to meet Musk’s deadlines, describing a culture clash between team members hailing from Microsoft’s slower development cycle and SpaceX’s relentless approach.

The senior-most executive reported as fired was vice president of satellites Rajeev Badyal. Only one of the executives mentioned in the report, Mark Krebs, has updated his LinkedIn profile to show that he no longer works at SpaceX.

A SpaceX spokesperson said two of the seven managers left of their own accord during the restructuring, but would not say who is now responsible for the Starlink project. The company shared the following statement:

The SpaceX Redmond office is an essential part of the company’s efforts to build a next-generation satellite network that can link the world with reliable and affordable broadband service, reaching those who have never been connected before. Given the success of our recent Starlink demonstration satellites, we have incorporated lessons learned and re-organized to allow for the next design iteration to be flown in short order. This is a very similar approach of rapid iteration in design and testing which led to the success of Falcon 1, Falcon 9, Falcon Heavy, and Dragon.

SpaceX is one of several companies planning to launch networks of thousands of satellites into low-earth orbit. Its rivals include Telesat and OneWeb, which is on its third CEO in two years after demoting the previous incumbent last month.

SpaceX launched its first two test satellites in February, and says they are functioning well. Reuters’ sources say SpaceX employees are using the satellites to play video games like Counterstrike and broadcast 4k YouTube videos between the Redmond office and SpaceX headquarters in Hawthorne, California.

While SpaceX’s rocket business has proven successful, the company’s heady valuation is based on expected returns from its telecommunications network. In 2015, it had expected satellite revenue to exceed earnings from rockets by 2020. Those projections are unlikely to be realized now, though the company is still planning to begin launches in 2019.

There is more time pressure than just the bottom line: These satellites require regulatory approval from the Federal Communication Commission and the International Telecommunications Union. If the companies with those rights don’t put their networks into operation in a timely fashion, they could lose that permission.

The projects are also incredibly capital intensive, requiring billions of dollars to build and launch the satellite networks. Past attempts at creating them have ended in expensive bankruptcies, but they lacked the advantages of today’s cheaper launch vehicles and satellites.

Still, the companies face daunting technical challenges: The satellites will orbit within a few hundred miles of Earth to eliminate latency, but that requires them to move at high speed. To maintain a connection with the ground below, the satellites will need to seamlessly pass data between them even as they zip around the Earth.

Those who follow Musk’s companies know he rarely tolerates delay and is quick to reject employees who don’t meet his (occasionally arbitrary) standards. While the Reuters report offers up a familiar portrait of the impatient chief executive, the anonymous sources say the company’s goal of offering internet service in 2020 is still “pretty much on target.” SpaceX has yet to publicly announce a manufacturing facility for the final design of its satellites, a crucial signal that it will build them at the scale necessary to make its internet constellation real.

This story has been updated with additional comment from SpaceX.

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