Virgin Orbit Ceases Operations and Lays Off 90% of Workforce Due to Lack of Investment
Virgin Orbit, the rocket company founded by British billionaire Richard Branson, has announced that it will cease operations “for the foreseeable future” due to its inability to secure new investment.[0] CEO Dan Hart told employees during an all-hands meeting on Thursday that the company would lay off about 90% of its workforce, or around 675 employees, by April 3. Virgin Orbit had been seeking additional funding to continue operations after a challenging year, which saw its first-ever satellite mission launched from UK soil fail in January. The company had hoped to secure a $200 million investment from Texas-based venture capital investor Matthew Brown, but talks reportedly collapsed over the weekend. Virgin Orbit had previously celebrated four successful missions, putting 33 satellites in orbit, before its first failure this year.
Instead of launching rockets from the ground like some competitors, Virgin Orbit employs the air launch technique. This involves deploying its LauncherOne rocket at a high altitude from beneath the wing of a modified Boeing Co. 747 aircraft.[1] The company developed the rocket at Virgin Galactic, years before the satellite-launch business was formally created.[2] Virgin Orbit had been spun out of Branson’s space tourism business Virgin Galactic in 2017, with the billionaire owning a 75% stake in the company.[3] Mubadala, the Emirati sovereign wealth fund, holds the second-largest stake in Virgin Orbit, at 18%.
In comments reported by CNBC, Hart told employees at the Thursday meeting that he would “not stop supporting you, whether you're here on the journey or if you're elsewhere”.[1] The company will provide severance packages for all departing staff, including a cash payment, extension of benefits, and support in finding a new position. The company’s two top executives will also receive “golden parachute” severances which were approved by the company’s board in mid-March, when the furloughs first took effect.
Virgin Orbit had been working to finish its investigation into the mid-flight failure of its previous launch, as well as finish preparations on its next rocket.[6] Despite the company’s struggles, a small team of Virgin Orbit employees had returned to work last week as part of an expected “incremental resumption of operations”.[7] The company is now preparing for its next planned rocket launches, including its second orbital launch attempt from UK soil.
The news of Virgin Orbit’s ceasing of operations caused the company’s stock to plunge 45% in after-hours trading, with shares worth just 19 cents each.[9] The company had listed on the Nasdaq in December 2021 via a SPAC deal, raising just $228 million of the $483 million sought.[10] The shares were worth $10 each, with the business meant to be valued at $3.7 billion.[10]
0. “Virgin Orbit to lay off 85% of workforce after failing to secure funding” Long Beach Business Journal – Long Beach News, 30 Mar. 2023, https://lbbusinessjournal.com/news/virgin-orbit-to-lay-off-85-of-workforce-after-failing-to-secure-funding
1. “Virgin Orbit lays off most staff over funding struggles” Digital Trends, 31 Mar. 2023, https://www.digitaltrends.com/space/virgin-orbit-lays-off-most-staff-over-funding-struggles/
2. “Virgin Orbit Ceases Operations After Failing to Find Funding” Yahoo Finance, 30 Mar. 2023, https://finance.yahoo.com/news/virgin-orbit-ceases-operations-failing-232051498.html
3. “Richard Branson satellite company Virgin Orbit laying off 85% of staff” Business Insider, 30 Mar. 2023, https://www.businessinsider.com/virgin-orbit-richard-branson-satellite-company-lay-offs-cease-operations-2023-3
4. “Virgin Orbit extends unpaid pause as Brown deal collapses, ‘dynamic' talks continue” CNBC, 27 Mar. 2023, https://www.cnbc.com/2023/03/27/virgin-orbit-extends-unpaid-pause-as-deal-collapses-talks-continue.html
5. “Virgin Orbit officially shutters its space launch operations” Engadget, 30 Mar. 2023, https://www.engadget.com/virgin-orbit-officially-shutters-its-space-launch-operations-231755999.html
6. “Virgin Orbit fails to secure funding and will cease operations” NBC News, 30 Mar. 2023, https://www.nbcnews.com/science/space/virgin-orbit-fails-secure-funding-will-cease-operations-rcna77507
7. “Virgin Orbit lays off most employees” SpaceNews, 30 Mar. 2023, https://spacenews.com/virgin-orbit-lays-off-most-employees/
8. “Virgin Orbit Extends Furloughs While Seeking Funding” Global Village space, 28 Mar. 2023, https://www.globalvillagespace.com/tech/virgin-orbit-extends-furloughs-while-seeking-funding/
9. “Virgin Orbit stock plunges after report says company will cease operations” Morningstar, 31 Mar. 2023, https://www.morningstar.com/news/marketwatch/202303301127/virgin-orbit-stock-plunges-after-report-says-company-will-cease-operations
10. “Virgin Orbit crashes back to earth after running out of funding” Startup Daily, 31 Mar. 2023, https://www.startupdaily.net/topic/space/virgin-orbit-crashes-back-to-earth-after-running-out-of-funding/
