Virgin Orbit, the satellite launch company founded by the billionaire Sir Richard Branson, is cutting 85% of its workforce after failing to secure fresh funding, raising fears that the firm may be on the brink of collapse.
The California-based company said in a US filing that about 675 staff would lose their jobs as part of efforts to cut costs, leaving about 100 employees to run what is left of the business. This was because of an “inability to secure meaningful funding”, the filing explained.
The chief executive, Dan Hart, is making last-ditch efforts to clinch a deal with financial investors but told staff on Thursday that the company would halt operations indefinitely, according to the Financial Times.
Virgin Orbit had already paused operations and put staff on furlough earlier this month as it tried to secure a funding lifeline.
Branson has reportedly promised to inject almost $11m (£9m) to cover severance payments for workers, covering most of the $15m costs the company is set to incur as a result of the job cuts. Most of the axed staff are expected to be let go by Monday. “Those impacted are located in all areas of the company,” Virgin Orbit said.
Virgin Group is understood to be flagging potential job opportunities for those leaving the business at its sister firm Virgin Galactic, which aims to offer space flight to tourists.
The latest pledge brings Branson’s investments in the venture to more than $70m over the past four months, having put forward a further $5m to support the company only weeks earlier.
Virgin Orbit’s US-listed shares were down almost 50% in pre-market trading, having already closed lower by 16%.
The job cuts come two months after Virgin Orbit – which was founded by Branson and is 75% owned by Virgin Investments – failed in its mission to launch the first satellite from UK soil in January. The company said the botched launch, which was meant to be a historic moment for the UK, was the result of an “anomaly” that meant the rocket could not reach the required altitude and was later lost.
Virgin Orbit said this month that its investigation into the failed mission was “nearly complete” and that “our next production rocket with the needed modification incorporated is in the final stages of integration and test”.
