Virgin Orbit, sister company of Richard Branson’s Virgin Galactic, is laying off most of its staff and halting operations for the foreseeable future after it failed to secure proper funding, The Washington Post reported on Friday. In a corporate disclosure made public on Thursday after markets closed, Virgin Orbit said that 675 people, or about 85 percent of employees, would be affected.
“We have no choice but to implement immediate, dramatic, and extremely painful changes,” CEO Dan Hart said during an all-staff call, according to CNBC. With the news, Virgin Orbit’s stock toppled: It was down 39 percent on Friday morning, with shares trading for a mere 20 cents.
Branson created Virgin Orbit in 2017 as a spin-off of Virgin Galactic, his spaceflight operation. While the latter is aiming to send wealthy tourists to space, Virgin Orbit was working with satellites and space-launch systems. In 2021, the company went public, with a valuation of $3.7 billion. But since then, it’s only lost money: In the third quarter of 2022, the most recent period for which detailed financials are available, Virgin Orbit had a net loss of $43.6 million, with revenue of $30.9 million.
Alongside its financial struggles, the company encountered some difficulties carrying out its mission. Virgin completed four successful orbital flights from the Mojave Desert in California throughout 2021 and 2022, but when it first attempted an orbital launch from the UK this past January, the rocket prematurely shut down and failed to reach orbit. The rocket then later landed in the Atlantic Ocean. After an investigation into the issue, it was revealed that a malfunctioning fuel pump filter had caused an engine to overheat and end its thrust ahead of schedule.
The announcement to completely cease operations comes after Virgin Orbit took an “operational pause” on March 16 to save money and explore options for keeping the company afloat. But now, because of the layoffs, the company will lose another $15 million or so, as it makes severance payments and other concessions related to the WARN Act, a country-wide law that governs mass layoffs.