Virgin Orbit: Sir Richard Branson’s rocket company fails to secure funding, lays off 85% of staff
After failing to secure new investment, British billionaire Sir Richard Branson’s rocket company Virgin Orbit will cease operations for the foreseeable future – according to multiple media reports – and lay off 85% of staff, affecting roughly 675 employees who “are located in all areas of the company.”
It comes weeks after Virgin Orbit paused operations in an effort to shore up its finances. Founded in 2017, the company develops rockets to carry small satellites and represents a noteworthy part of Sir Richard’s business empire, which also includes space tourism company Virgin Galactic and airline Virgin Atlantic.
Earlier this year, the company failed to complete the first-ever satellite launch from UK soil as the LauncherOne rocket reached space but couldn’t reach its target orbit. The mission was considered a milestone for UK space exploration and was expected to help the country soon turn into a major international player.
Virgin Orbit’s shares slid over 44% in the after-hours trading in New York yesterday. In a US regulatory filing, the company blamed the recent developments on its inability to secure meaningful funding. The British billionaire’s investment firm Virgin Investments has injected more than $10 million into the company to fund different costs related to the job cuts, it added.
Virgin Orbit said it expects costs concerning the recent workforce reduction, including payments to the laid-off employees, to total around $15 million. According to CNBC – which first released a report on the layoffs – chief executive Dan Hart said: “We have no choice but to implement immediate, dramatic and extremely painful changes.”