Operations are ceased ‘for foreseeable future’
Around 675 employees will be laid off across “all areas” of Sir Richard Branson’s Virgin Orbit after funding talks collapsed last week, prompting the British billionaire to inject millions into the company.
According to media reports, Sir Richard Branson’s Virgin Orbit is laying off 85% of its staff and will cease operations for the foreseeable future. The satellite launch company, which is 75%-owned by the British billionaire’s Virgin Group, was unable to secure new funding from investors and in January, the company failed to complete the first-ever satellite launch from UK soil.
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 chief executive Dan Hart told employees during a Thursday afternoon meeting that the company would be ceasing operations “for the foreseeable future”. Following news of the layoffs, shares in the company plummeted by 38% in after-hours trading in New York.
The staffing cuts will impact around 675 employees across “all areas of the company”, Virgin Orbit said in a regulatory filing, adding that other total costs are expected to reach just over $15m (£12.1m).
It was reported last week that Texas-based Matthew Brown had been in talks to invest $200m (£161m) in the company, but those talks collapsed last week, according to Reuters. A report in the Financial Times also suggested Virgin Orbit’s chief executive Dan Hart is hoping to seal a last-minute investment to stop the firm from collapsing.The company furloughed nearly all of its 750 employees earlier this month in what Mr Hart described as an “operational pause” while Virgin Orbit sought a financial lifeline.
Virgin Orbit was founded in 2017 and had been valued at $3.2bn when it went public in 2021 through a “blank cheque deal”, but its failed satellite launch represented a major blow to the business.