Virgin Orbit will lay off around 85% of staff

Rocket maker Virgin Orbit said on Thursday it would lay off about 85% of its staff because it had been unable to raise new investment.

Shares of the company, which is owned by Richard Branson’s Virgin Group, fell 38% in the aftermarket.

About 675 employees will lose their jobs, and the company expects to pay about $15 million in related costs, Virgin Orbit said in a regulatory filing.

The decision was a result of “the company’s inability to secure significant financing,” the filing said.

Virgin Orbit laid off nearly all of its 750 employees on March 15 in what a spokesman called an “operating hiatus” as the company sought funding to allow it to focus on improving rocket design.

A small group of employees returned to work on March 23 to focus on rocket engine work, an email to staff said at the time.

The company expects most of the layoffs to be completed by April 3.

The rocket maker went public in 2021 through a SPAC, where it raised $255 million less than expected. In addition to the recent failure to raise funds, a missed rocket launch in January has increased the pressure on the company.

Since November, Branson’s Virgin Group has provided $50 million in financing to the satellite launcher on debt secured by its equipment and other assets in the event of bankruptcy, according to regulatory filings.

Source: Terra

Rose

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