Outbound Aerospace Cuts All Jobs as Company Winds Down Operations

Outbound Aerospace announced on December 11, 2025, that it would lay off its entire workforce as the company winds down operations. The Seattle-based aerospace startup, which focused on developing advanced propulsion systems for small satellites, made the decision to close after struggling to secure additional funding and facing mounting challenges in the competitive space technology market. The complete workforce reduction affects all employees across the company's engineering, manufacturing, and administrative divisions.

Context of the Outbound Aerospace Layoffs Decision

The decision to shut down operations comes after Outbound Aerospace exhausted its funding runway and failed to secure Series B financing needed to continue development of its proprietary electric propulsion technology. Industry sources indicate the company had been seeking $25 million in additional capital since mid-2025 but faced investor skepticism about the increasingly crowded small satellite propulsion market.

The aerospace startup sector has experienced significant consolidation over the past year, with venture capital firms becoming more selective about space technology investments. Rising interest rates and a general pullback in tech funding have particularly impacted early-stage aerospace companies that require substantial capital for research and development before generating revenue.

Outbound Aerospace's closure reflects broader challenges facing the NewSpace industry, where dozens of companies compete to provide propulsion, manufacturing, and launch services for the growing small satellite market. Larger players like SpaceX and established aerospace contractors have captured significant market share, making it difficult for smaller startups to differentiate their offerings.

Impact on Operations

The workforce reduction affects approximately 85 employees across Outbound Aerospace's Seattle headquarters and testing facility in Redmond, Washington. The layoffs impact all departments, including the company's core engineering team that was developing ion thruster technology, manufacturing specialists working on production processes, and business development staff responsible for customer relationships.

The company's research and development operations will cease immediately, ending work on several prototype propulsion systems that were in various stages of testing. Outbound Aerospace had been working with multiple small satellite manufacturers and had signed preliminary agreements for future propulsion system deliveries, but these contracts will not be fulfilled.

The shutdown also affects the company's intellectual property portfolio, which includes several patents related to miniaturized electric propulsion systems. Industry analysts expect these assets may be acquired by larger aerospace companies or competitors seeking to expand their technology capabilities.

Company Financial Background

Founded in 2021, Outbound Aerospace raised $8 million in Series A funding led by Seattle-based venture capital firm Madrona Venture Group, with participation from space-focused investors including Bessemer Venture Partners and Airbus Ventures. The company had positioned itself as a provider of cost-effective propulsion solutions for the rapidly growing constellation satellite market.

The startup's business model relied on developing standardized electric propulsion modules that could be easily integrated into various small satellite designs. However, the company struggled to achieve the manufacturing scale necessary to compete on price with established suppliers while also investing heavily in continued technology development.

Financial pressures mounted throughout 2025 as the company burned through its initial funding while working to complete product development and secure its first major commercial contracts. The inability to reach key technical milestones on schedule contributed to investor concerns about the company's long-term viability.

Industry Outlook

The Outbound Aerospace closure reflects ongoing consolidation in the commercial space industry, where funding has become increasingly concentrated among companies with proven revenue streams or breakthrough technologies. The small satellite propulsion market remains competitive, with established players like Busek Co. and Accion Systems maintaining strong positions alongside newer entrants.

Industry experts note that while demand for small satellite propulsion systems continues growing, the market has become more price-sensitive as satellite constellation operators seek to reduce costs. This trend has favored companies with existing manufacturing capabilities and established supply chains over early-stage startups.

Conclusion

The shutdown of Outbound Aerospace represents another example of the challenging funding environment facing aerospace startups in 2025. While the company's technology showed promise, the combination of intense market competition, high capital requirements, and tighter investor scrutiny ultimately proved insurmountable. The closure underscores the importance of achieving rapid commercialization and securing adequate funding runway in the capital-intensive aerospace sector.