Insitu to Scale Back Workforce

Boeing drone unit Insitu, has announced an impending cut in its workforce by about 200 people in the Columbia River Gorge facility, due to competitive pressures and a falloff in business.

Without providing any details on the overall number of people who will be laid off chief executive Esina Alic informed the employees about the decision. A person with direct knowledge of the cuts said they total 15%, confirming a tally first reported by The Seattle Times.

CEO Esina Alic held an all-hands meeting to discuss the cuts Tuesday morning, according to Insitu spokeswoman Jenny Beloy.“Our market has become more challenging, and with that we’ve seen an increased need to reduce costs,” Alic said.

Insitu’s catapult-launched ScanEagle drones are used by the military for surveillance in battle zones and by the Coast Guard for maritime surveillance. The company provides both the drone systems and the field operators who deploy them.

An Insitu engineer, speaking on condition of anonymity said a series of quality issues hurt the company’s reputation. Insitu lost out this spring in a competition to provide the U.S. Army with a new drone scout called the Future Tactical Unmanned Aerial System (FTUAS). In a “fly-off” competition between the contending drones conducted in Utah in November, the engineer said, the Insitu drone crashed repeatedly during the field tests.

Acknowledging the three FTUAS field-test crashes Beloy said the causes “are under review” added that Insitu remains focused on “developing the best technology to support our soldiers.”

Andy von Flotow, a co-founder of Insitu, left the company when Boeing bought it in 2008 said Insitu invented its specific drone niche: a large, long-endurance aircraft of about 50 pounds, featuring high-quality cameras, along with the contractor business model of providing a team of operators to field the drones. According to von Flotow a lot of competitors have jumped into that niche, which doesn’t require huge investment, “Insitu invented that business model in the early 2000s,” he said, “Now there’s a whole bunch of me-toos’.” Von Flotow later launched Hood Tech on the Oregon side of the river, making camera systems and catapult launchers for ScanEagle with a payroll of more than 100.

He explains how several small suppliers in the Gorge area depend upon doing business with Insitu, including Australian firm Orbital UAV, which makes drone engines; Sagetech, which makes transponders for the drones; and Zepher, which builds mechanisms for capturing the drones on return from their missions. Insitu has helped reshape a Gorge economy that was once dominated by aluminium smelters, timber mills and agriculture and now is something of a high-tech aerospace incubator. Now all those suppliers and Von Flotow’s Hood Tech too will likely be hit by the downturn at Insitu.

“This was not an easy decision. Changes in our competitive landscape require us to do more with less,” Beloy said adding that employees will receive 60 days warning before losing their jobs and some will have an opportunity to take jobs elsewhere with Boeing.