“We have no choice but to implement immediate, dramatic and extremely painful changes,” CEO Dan Hart told employees, according to CNBC.
Virgin Orbit was founded by Branson in 2017 as a sister company to his largest spaceflight company, Virgin Galactic, with the goal of building flexible space launch systems. The company’s LauncherOne rockets are designed to be air-launched from a modified Boeing 747-400 aircraft carrier.
While Virgin Galactic plans to build a business around transporting wealthy tourists into space, Virgin Orbit has its roots in the satellite business, launching its rockets as a way to put small satellites into orbit.
Its first orbital launch attempt from the UK failed in early January. The company’s rocket experienced an “anomaly” that led to a premature shutdown and was unable to reach orbit, according to a report. statement Of the company.
An investigation concluded that the initial phases of the launch had gone as planned, which the company said was the first of its kind for a launch from Western Europe. But a malfunctioning fuel pump filter later caused an engine to overheat and end its thrust too soon. She fell back to earth and landed in the Atlantic Ocean.
The company also had financial problems. When it went public in 2021, it was valued at $3.7bn, but has since lost money and struggled to finance its operations. In the third quarter of 2022, the most recent quarter for which detailed financial information is available, the company reported a net loss of $43.6 million on revenue of $30.9 million.
The news comes after Virgin Orbit had already launched a company-wide “operational pause” on March 16 to save money while its leaders spoke with funders and explored other options.
The layoffs will cost the company about $15 million, consisting of $8.8 million in severance pay and other employee benefits, plus about $6.5 million in costs related to seeking relocation services and other requirements. of the Warn Act, a US law that covers mass layoffs. It will cover severance costs through the sale of a convertible note to one of Branson’s other companies, according to a filing with the SEC.
Shares of the company plunged 39 percent Friday morning to open trading at a value of around 20 cents.