Virgin Orbit lays off most of its staff ahead of last-ditch buyout talks
Image credit: Virgin Orbit/Greg Robinson
Richard Branson’s satellite launch firm Virgin Orbit has announced it is cutting 85 per cent of its workforce and has suspended operations after failing to find new funding.
According to the Financial Times, Branson has injected just under £9m to cover the severance costs of letting go of 675 staff, leaving just 100 employees remaining to keep the company going on a skeleton crew.
The move comes only weeks after the firm was reported to be seeking a potential buyout from outside investors.
In December, Virgin Orbit was awarded a licence by the Civil Aviation Authority to operate the UK’s first space launch from Spaceport Cornwall at Cornwall Airport Newquay. But the following month’s launch failed spectacularly due to a dislodged fuel filter that caused the engine to overheat.
The Start Me Up mission had been hailed as “historic”, and was set to open the door for satellite launches in the UK.
Satellite industry representatives subsequently told MPs that “seismic change” would be needed to boost the appeal of launches from British soil due to the failure of the launch.
Dan Hart, chief executive of Virgin Orbit, is still seeking last-minute investment to stop the firm collapsing entirely. But this did not stop shares plunging by as much as 40 per cent on the New York exchange once the sackings became public knowledge.
In US regulatory filings, the firm confirmed the job cuts “in order to reduce expenses in light of the company’s inability to secure meaningful funding”. Severance payments and other costs are expected to total more than £12m.
Virgin Orbit had already made deals with various firms, including Spire Capital, for a total value of $143.1m (£116m) representing a number of satellite launches.
Prior to going public in August 2021, Virgin Orbit was owned by Branson’s Virgin Group and the Emirati state-owned Mubadala, which had cumulatively invested about $1bn in the firm.
Branson's other space-faring firm Virgin Galactic has also had to postpone its commercial flights to space multiple times – most recently because the FAA demanded it conduct an investigation into one of its flights.
The service was originally expected to launch as early as October 2021 but is only now nearing its final phase, according to an earnings call last month.
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