Dozens Of Jobs Cut At Tucson Aerospace Company

TUCSON, AZ — A Tucson aerospace company is laying off 77 workers after losing a contract tied to NASA's Lunar Gateway program, adding to a stretch of weak job numbers for the region.

Paragon Space Development Corp. filed a Worker Adjustment and Retraining Notification with the Arizona Department of Economic Security on June 12.

The Phoenix Business Journal first reported that the filing followed the termination of a Northrop Grumman contract tied to NASA's Lunar Gateway program.

The layoffs will affect the company's Tucson headquarters at 3400 E. Britannia Road.

The timing is difficult for a metro area already struggling. Tucson lost 1,500 jobs over the year in April, a 0.4% decline that stands well below the national job growth rate of 0.2%.

Year-to-date through April, Tucson jobs are down 0.7%, with losses spread across leisure and hospitality, government, construction, manufacturing, financial activities and several other sectors.

Researchers point to a mix of factors weighing on the local and state economy. According to an analysis by University of Arizona economist George Hammond, reduced hiring driven by federal policy uncertainty, tariffs, elevated interest rates and demographic aging are all slowing job growth across Arizona.

Hammond's report also shows a stark divide within the state. The Phoenix metro added 15,400 jobs over the year in April, outpacing national growth. Tucson has not shared in that momentum.

Statewide, Hammond found Arizona ranked third in the nation for percentage job growth in the first quarter of 2026, adding 15,500 jobs from the previous quarter — gains concentrated largely in the Phoenix area rather than distributed evenly across the state.

The Paragon layoffs come as Southern Arizona's aerospace and defense sector watches federal spending priorities closely. No additional timeline or details about the cuts were included in the WARN filing.