Virgin Orbit, the rocket company founded by British billionaire Sir Richard Branson, announced on Thursday that it will lay off 85% of its staff and cease operations for the foreseeable future after failing to secure new investment. The decision comes weeks after the company paused operations in an apparent attempt to shore up its finances.
Impact of the layoffs
According to a US regulatory filing, Virgin Orbit made the decision “in order to reduce expenses in light of the company’s inability to secure meaningful funding.” The layoffs will impact approximately 675 employees who “are located in all areas of the company.” The company’s shares plunged by more than 44% in after-hours trading in New York on Thursday.
Virgin Orbit said that Sir Richard’s investment firm Virgin Investments has injected $10.9m (£8.8m) into the company “to fund severance and other costs related to the workforce reduction.” The company expects payments to laid-off staff and other costs to total around $15m.
Left with no choice
Media reports suggest that the company’s boss, Dan Hart, told staff at a meeting that the firm will suspend its activities until further notice. “We have no choice but to implement immediate, dramatic, and extremely painful changes,” he reportedly said.
Earlier this year, a Virgin Orbit rocket failed to complete the first-ever satellite launch from UK soil. The company has not turned a profit as a public company since its founding in 2017. It develops rockets to carry small satellites and is part of Sir Richard’s business empire, which includes the airline Virgin Atlantic and space tourism company Virgin Galactic.\
Setback for Commercial Space
The news of Virgin Orbit’s layoffs and suspension of operations is a blow to the commercial space industry, which has seen significant growth in recent years. The industry has attracted investment from tech billionaires such as Jeff Bezos, Elon Musk, and Sir Richard Branson, who are competing to launch new space technologies and make space travel more accessible to the public.
Virgin Orbit’s failure to secure new funding highlights the challenges facing companies in the sector, particularly those that are focused on developing new technologies. The industry is still in its early stages, and many companies are struggling to turn a profit despite the high levels of investment.
The layoffs at Virgin Orbit will have a significant impact on the company’s workforce and the wider space industry. The company’s employees are highly skilled and experienced, and their loss will be felt by the industry as a whole. It remains to be seen whether Virgin Orbit will be able to secure new funding and resume operations in the future, or whether it will be forced to shut down permanently.