Virgin Orbit – the rocket company founded by British billionaire Richard Branson – is laying off most of its staff as company leadership struggles to secure additional funding.
According to a public, about 675 employees will be sacked by April 3. document Thursday’s filing covers about 85% of Virgin Orbit’s workforce. The move was made to “reduce expenses in light of the company’s inability to secure meaningful funding”.
was first reported by cnbc, A Virgin Orbit spokeswoman declined to comment beyond the filing.
On 15 March, Virgin Orbit CEO Dan Hart asked almost all of the company’s employees to cease operations and laid off their jobs. on a week’s furlough as The Rocket Company worked to secure additional funding.
The public document filed Thursday said the company will incur a $15 million charge related to the decision to cease operations, including “$8.8 million in severance pay and employee benefit costs, and primarily related to outplacement services and the WARN Act.” Related other costs include $6.5 million.” exposure.”
The WARN Act is a US law that requires corporations to provide advance notice to employees 60 days before layoffs.
The company acquired Virgin Orbit Holdings, Inc. $10.9 million convertible note – a type of short-term debt – to a wholly owned subsidiary of Branson’s The Virgin Group.
Virgin Orbit was founded in 2017 after being spun off from its sister company, Virgin Galactic, to use supersonic planes to take high-paying tourists on joy rides at the edge of space. focused on seduction. Virgin Orbit, on the other hand, is developing an air-launched rocket called the LauncherOne to carry small satellites into orbit.
The company was an early leader among dozens of startups competing to build lightweight rockets to launch small satellites. Virgin Orbit’s LauncherOne rocket reached orbit for the first time in January 2021, ahead of most of its competitors and after just one failed attempt. After this it completed three more successful missions from California.
But in January, the company attempted to launch its first rocket from the United Kingdom. That mission ended in failure.
A Virgin Orbit spokesperson said in a March 15 statement that “testing of that mission” is nearly complete and our next production rocket with necessary modifications is in the final stages of integration and testing.
Virgin Orbit announced that it was going public in the fall of 2021 through a reverse merger agreement called a SPAC. In its latest quarterly financial filing, posted in November, the company reported negative cash flow of $50 million.
The company’s share price was down 16% during Thursday trading hours, and fell 40% during after-hours trading. Shares were worth about 19 cents as of Thursday evening.
Over the past few months, the company had been receiving additional financial backing from Branson’s family office, called Virgin Group, according to public filings.