Virgin Orbit, the ailing US space company, will lay off approximately 85% of its employees in a bid to save the company. The firm had failed to raise additional funds and could no longer continue with already limited business operations. CEO Dan Hart broke the news to staff during a meeting, admitting that the decision was immediate, drastic and extremely painful. Talks with two potential investors had failed over the weekend. The restrictions would amount to approximately 675 job losses, or 85% of Virgin Orbit’s workforce. All departments and teams would be affected by the layoffs.
The departing employees would receive a severance package, including a cash payment, an extension of social benefits, support in finding a new job, and preference for new hires in sister company Virgin Galactic. Virgin Orbit had found itself in dire financial straits following a failed rocket launch designed to launch satellites. The company had already posted losses of $140 million for the last three quarters of 2022. The announcement of layoffs did not go down well with the company’s shareholders, who sold their shares in extended trading. The share price fell around 40% to 34 cents. Year-to-date, Virgin Orbit stock is down about 82%.
Earlier in March, Virgin Orbit had taken a break from operations and put almost all employees on unpaid leave and postponed payroll accounting by a week. After a week, operations were resumed by a small team as promised. During this time, many employees had already started looking for a new job to be ahead of the layoffs that were now announced. Despite the layoffs, however, Virgin Orbit will aim to continue with limited operations: “We are simply rationalizing the business so we can focus on revenue growth and become cash-flow positive,” Hart said, according to The Guardian.