Virgin Orbit to Lay Off 85% of Workforce and Cease Operations Due to Lack of Funding
Virgin Orbit, the rocket company founded by Sir Richard Branson, has announced that it will lay off 85% of its workforce after failing to secure new investment. The company will also halt its operations for the foreseeable future, as it faces financial difficulties. This news comes just weeks after the firm paused its operations in
Virgin Orbit to Lay Off 85% of Workforce and Cease Operations Due to Lack of Funding
Virgin Orbit, the rocket company founded by Sir Richard Branson, has announced that it will lay off 85% of its workforce after failing to secure new investment. The company will also halt its operations for the foreseeable future, as it faces financial difficulties. This news comes just weeks after the firm paused its operations in an apparent attempt to shore up its finances.
In a regulatory filing in the US, Virgin Orbit said that it had made the decision to cut staff “in order to reduce expenses in light of the company’s inability to secure meaningful funding.” The layoffs will affect approximately 675 employees across all areas of the company. Sir Richard’s investment firm, Virgin Investments, has injected $10.9m (£8.8m) into Virgin Orbit to fund severance and other costs related to the workforce reduction.
Virgin Orbit has not turned a profit as a public company since its founding in 2017. It develops rockets to carry small satellites and is part of Sir Richard’s business empire, which includes airline Virgin Atlantic and space tourism company Virgin Galactic.
The company’s shares plunged by more than 44% in after-hours trading in New York on Thursday, following the announcement of the layoffs. The firm had recently attempted the first ever satellite launch from UK soil earlier this year, which ended in failure when its LauncherOne rocket fell short of reaching its target orbit.
Virgin Orbit’s Chief Executive, Dan Hart, reportedly told staff that the company would suspend its activities until further notice. “We have no choice but to implement immediate, dramatic and extremely painful changes,” he said. Virgin Orbit did not immediately respond to requests for comment.
The layoffs are expected to cost around $15m, including payments to laid off staff and other associated costs. The company had previously said it was “initiating a company-wide operational pause” and that it anticipated providing an update on its future operations in the coming weeks.
Overall, this news is a major setback for Sir Richard’s space ambitions and for the UK’s wider space industry. It was hoped that the first ever satellite mission launched from UK soil would mark a major step forward in fulfilling the country’s ambition to become a global player in space exploration.
