Virgin Galactic laid off 185 employees — about 18% of its workforce — as it ramps up efforts to produce new spaceships,

CNBC reported the news. 

Virgin Galactic CEO Michael Colglazier told employees in an email Tuesday that they would find out in a phone call by Thursday if they were being let go.

"It will take a bit longer to reach everyone vs. simply sending an email, but we want to have personal discussions as much as possible," Colglazier said. "As a company, we will be working from home during the remainder of this week, as on-site work locations will be unavailable through the end of the week."

The space tourism company, cofounded by Richard Branson in 2004, told investors in an earnings call Wednesday that it would start 2024 with "approximately 840 full-time employees."

It expected the reduction in headcount to generate around $25 million in cost savings. 

Colglazier doubled down on his comments from the email to workers in the investors' call and said its Delta Class spaceships would be a driver of profitability and growth. The company "must focus our efforts on bringing these ships into service," he added.

The company said it was due to open a factory in Phoenix next year to produce six of the spaceships a year. It planned to pause spaceflight operations in 2024 to concentrate on producing its Delta Class spaceships. 

The ships are designed to carry six passengers on weekly spaceflights, Virgin Galactic has previously said. It has targeted 400 flights a year from New Mexico's Spaceport America. Colglazier said it expected to start operating flights with its new spaceships in 2026 after testing them in 2025. 

Virgin Galactic completed its first commercial space flight in June and carried out a total of five commercial flights this year, Space News reported.