Virgin Orbit is furloughing about 85% of its workforce to further cut costs.
The news, which Virgin Orbit filed with the U.S. Securities and Exchange Commission on Thursday, comes just two weeks after the company laid off all employees and went into a “suspension of operations” to find more cash. That’s what I mean. There was also talk that Texas-based venture capitalist Matthew Brown might come to the rescue, but that story was dismissed over the weekend. Today’s filing confirms that Virgin was unable to find another lifeline.
Virgin CEO Dan Hart was reportedly hoarse again by CNBC, according to audio from all employees on Thursday afternoon obtained by CNBC. We have no choice but to make drastic and very painful changes.”
He said the call was “probably the hardest all-hand I’ve ever done in my life.”
Layoffs span all departments. But even layoffs come at a price for the underfunded Virgin Orbit. The company will pay approximately $8.8 million in severance and employee benefits, plus another $6.5 million of his related to placement services and regulatory compliance.
To pay for these impending costs, Virgin received a $10.9 million infusion from Virgin Group, the umbrella company that oversees billionaire Richard Branson’s various businesses.
Virgin Orbit is the brainchild of Branson, who is still the majority owner of the company. But apparently even Branson — who, through his conglomerate Virgin Group, put more than $55 million into the sinking space company — is done funding the company.
Virgin Orbit is able to successfully complete four missions using a unique system that releases rockets in flight using modified Boeing 747s. The company’s latest mission from Cornwall, UK, fell through due to problems with the rocket’s second stage, a major blow to Virgin’s plans to continue launches this year.
Virgin Orbit shares fell to just $0.34 from $1.32 at the start of the month.
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