Virgin Orbit announces that it will have to lay off 85% of its staff
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Rocket-making company Virgin Orbit Holdings recently announced some bad news, revealing that it has to lay off 85% of its staff. The company revealed yesterday, March 30th, that this is necessary as it was not able to raise new investments. Following the announcement, the company’s shares plummeted by 38% in after-hours trade.
675 employees lost their jobs due to the lack of funding
In its regulatory filing, Virgin Orbit said that around 675 people would lose their jobs in the move. Not only that, but it expects to take related charges of approximately $15 million. The filing specifically said that the reason behind the decision was the “inability to secure meaningful funding.”
The firm previously went public two years ago, in 2021. At the time, it managed to do so through a blank-check deal, but unfortunately, it did not manage to reach its goal. In fact, it raised $255 million less than what was expected. It did not manage to raise additional funding in recent efforts, and the pressure on the company was increased even further with it failed its rocket launch in January 2023.
Some reports from last week mentioned that Matthew Brown was discussing a $200 million investment into the firm, but it would appear that these talks have collapsed in the meantime. Two unnamed sources familiar with the talks have revealed that it will not happen.
Even so, Virgin Orbit published a statement involving the talks, saying that Brown’s comments regarding the company were noted. This came after he made an appearance on CNBC, discussing the matter. Virgin Orbit also added that it was involved with more investment discussions with some other potential partners, but it did not go into detail to explain who was considering investing in it. Brown himself declined to comment further on the matter.
Virgin Orbit will only keep a small group who are working on the engine
Between November 2022 and March 2023, Virgin Group has also provided $50 million to the satellite launch firm, secured against its equipment, as well as other assets. This was necessary in case the company went bankrupt, as was described in securities filings.
Before yesterday’s announcement, Virgin Orbit also revealed on March 15th that it is furloughed almost all of its 750 employees in an operational pause, as the spokesperson called it at the time. During the pause, the firm tried to find financial aid that would allow it to continue operations and focus on improving its rocket design.
About a week later, on March 23rd, a relatively small group of the company’s employees was called to return to work and focus their efforts on the rocket engine. However, now it appears that the rest of the team will not be coming back, and Virgin Orbit said that layoffs would be complete by April 13th.