Virgin Orbit, the rocket company spun off from billionaire Richard Branson’s spaceflight company, will lay off most of its staff and freeze operations after it failed to raise enough money from investors.
The layoffs will affect about 675 people, making up 85 percent of the staff, according to a corporate disclosure made public Thursday after markets closed for the day. Just 100 of them remain, according to CNBC. The network also reported that Virgin Orbit plans to halt operations for the foreseeable future, citing a recording from an all-staff call it had obtained.
“We have no choice but to implement immediate, dramatic and extremely painful changes,” chief executive Dan Hart said told employees, according to CNBC.
Virgin Orbit was founded by Branson in 2017 as a sister company to his larger spaceflight company, Virgin Galactic, with the goal of building flexible space launch systems. The company’s LauncherOne rockets are designed to be air-launched from a modified Boeing 747-400 carrier.
When the company went public in 2021, it was valued at $3.7 billion, but it has lost money ever since and struggled to fund its operations.
The layoffs will cost the company about $15 million, consisting of $8.8 million in severance payments and other employee benefits, plus about $6.5 million in costs related to finding outplacement services and other requirements of the Warn Act, a U.S. law covering mass layoffs.
The company’s stock plummeted 41 percent in premarket trading Friday.
This is a developing story and will be updated.
Source: washingtonpost.com
