The bulk of the staff at Virgin Orbit, the rocket business created by British billionaire Richard Branson, are being let go while the management team tries to raise more money.
According to a public document submitted on Thursday, 675 employees—or around 85%—of the Virgin Orbit workforce will be let go by April 3. The decision was taken in an effort to “reduce expenses in light of the company’s inability to secure meaningful funding.”
CNBC first reported on the development. Beyond the filing, Virgin Orbit’s spokesmen declined to comment.
Nearly all of Virgin Orbit’s employees were placed on a weeklong furlough on March 15 after CEO Dan Hart instructed the firm to suspend operations while it sought out new funding.
According to the publicly available document submitted on Thursday, the company will be hit with expenses totaling $15 million as a result of its decision to cease operations, including “$8.8 million in severance payments and employee benefits costs, and $6.5 million in other costs primarily related to outplacement services and WARN Act exposure.”
US legislation known as the WARN Act mandates that businesses provide employees with 60 days’ notice before firing them.
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Funding Expansion
Additionally, the business sold a $10.9 million convertible note to Virgin Orbit Holdings, Inc., which is entirely controlled by Richard Branson’s The Virgin Group.
After separating from its sister firm, Virgin Galactic, which focuses on utilizing supersonic jets to launch wealthy travelers on joy flights to the edge of space, Virgin Orbit was established in 2017. In contrast, Virgin Orbit has been working on the LauncherOne air-launched rocket, which is intended to carry tiny satellites into orbit.
The business was a pioneer among the hundreds of businesses that competed to develop portable rockets for modest satellite launches. LauncherOne, a rocket developed by Virgin Orbit, made its maiden orbital entry in January 2021—earlier than most of its rivals and with just one failed attempt. After that, it successfully completed three additional missions outside of California.
However, the business attempted its maiden rocket launch from the United Kingdom in January. That mission was unsuccessful.
The investigation into that mission “is nearly complete, and our next production rocket with the needed modifications incorporated is in the final stages of integration and testing,” a Virgin Orbit spokeswoman said in a statement on March 15.
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Source: CNN
