Paragon Space Lays Off 70 Employees After NASA Cancels Lunar Gateway Program – What’s Next? (2026)

Paragon Space Development Corp., a subcontractor for NASA's lunar Gateway project, has laid off 70 employees following the program's cancellation. This decision comes as a result of Northrop Grumman, the prime contractor for the Gateway's Habitation and Logistics Outpost (HALO) module, terminating Paragon's contract to provide life support systems. The HALO module was a crucial component of the Gateway, a planned lunar facility designed to support Artemis missions. NASA's decision to halt work on the Gateway indefinitely at its Ignition event in March effectively canceled the project.

Paragon's president and CEO, Mark Greeley, described the layoffs as a challenging yet necessary step, emphasizing the impact on dedicated employees. The company, based in Tucson, Arizona, with additional offices in Colorado and Texas, expressed confidence in its ability to adapt. Despite the setback, Paragon believes the loss of the HALO contract is not a fatal blow, as the company's expertise in life support systems remains relevant for future projects.

Northrop Grumman, however, is exploring alternative uses for the HALO module, including its potential conversion into a lunar habitat. The company acknowledged corrosion issues with the module's structure, which were provided by another subcontractor, Thales Alenia Space. Despite these challenges, Paragon remains optimistic about its future, focusing on its core strengths in life support systems and exploring opportunities in NASA's lunar base plans and other government and commercial ventures.

This situation highlights the complex nature of space projects, where cancellations and reallocations can significantly impact subcontractor operations. Paragon's resilience and adaptability in the face of adversity demonstrate the industry's ability to navigate challenges and continue contributing to the advancement of human spaceflight.

Paragon Space Lays Off 70 Employees After NASA Cancels Lunar Gateway Program – What’s Next? (2026)
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