Virgin Orbit, the satellite-launching subsidiary of Richard Branson’s Virgin Group, is reportedly ceasing operations "for the foreseeable future" after failing to secure a funding lifeline. The company will lay off nearly 90 per cent of its workforce, constituting about 675 job roles with only 100 positions remaining.
The layoffs are expected to be completed by April 3rd and will cost the company approximately $15 million in severance payments and other costs related to winding down its business. The cash injection of $10.9 million from Branson's investment arm, Virgin Investments, is expected to cover most of the severance payments.
Virgin Orbit has been investigating the mid-flight failure of its launch earlier this year which intended to demonstrate UK’s plan for being a space nation in the future. In January, a Virgin Orbit jumbo jet took off from Spaceport Cornwall in Newquay while carrying a rocket under one wing but failed due to a dislodged fuel filter.
Sir Richard Branson has injected £11m into Virgin Orbit as it struggles with financial challenges following its unsuccessful launch mission from Cornwall two months ago which led to a collapse in share prices.
Despite achieving four successful launches and receiving small tranches of funding via an investment arm of Branson’s Virgin Group between November and February respectively, the company has not turned an operating profit since going public in January this year.
Laying off most staff members is part of last-ditch efforts by chief executive Dan Hart to reduce expenses while securing meaningful funding for their business. However, according SEC regulatory filings released yesterday; they have ended all operations immediately across every department leaving just around one hundred employees remaining at the firm.
This news comes at an unfortunate time as many companies struggle during these uncertain times stemming from coronavirus-related issues that have impacted businesses' revenue streams worldwide. This is a developing story, and we will keep you updated on any further developments.