Last night, CNBC broke the shocking news that Virgin Orbit has suspended operations for at least a week while it seeks funding to support its operations. As part of that suspension, company executives reportedly told staff at an all-hands meeting that they were furloughed and would be without pay.
This news is not at all surprising. Virgin Orbit’s financial woes have been discussed and analyzed by the media for months, including here on TechCrunch. Many people wonder how a company can continue to operate sustainably.
The first failure occurred when the company entered the public market through a merger with a special purpose acquisition company (SPAC). The deal, which Virgin Orbit said would earn him as much as $383 million in his SPAC earnings, would earn him only $68 million (and $228 million overall) from the SPAC. Turns out it wasn’t.
Since then, the company continued to run out of cash rapidly. In its latest quarterly financial report filed at the end of last year’s third quarter, Virgin Orbit reported cash on hand of approximately $71 million and a net loss of $139.5 million for the nine months to September 2022. doing. The 2022 results will further clarify the fragile financial situation, but Virgin Orbit has not set a date for when they will be announced.
In recent months, Richard Branson’s Virgin Group has injected a series of lifelines into the rocket company, including $25 million last November and another $20 million the following month. The small start-up company received another $10 million in January, also from Virgin Group. Notably, the $20 million investment is a secured note, meaning Branson’s Virgin Group is the number one priority for nearly all of the company’s assets, including aircraft.
The company hit yet another major roadblock earlier this year when a long-awaited launch from Cornwall, UK, failed due to a problem with the rocket’s second stage fuel filter. A series of successful missions followed by failure resulted in the complete loss of the payload.
that news isn’t it Surprise is exactly the problem. It shouldn’t have been a staff furlough. Company employees should not bear the brunt of management’s mismanagement of capital. What happened in this case, at least, reveals a serious failure of leadership.
Since the news broke, dozens of Virgin Orbit employees have taken to LinkedIn to let others know they are open to work. Fortunately, there is a huge demand for talent in the space industry right now. Should Virgin Orbit cease operations indefinitely, all Virgin employees (technical and otherwise) are expected to find other positions promptly.
