Virgin Orbit on brink of collapse as it sacks 85pc of staff
Virgin Orbit is on the brink of collapse after the troubled rocket launch company announced it was laying off 85pc of its staff and ceasing operations.
Sir Richard Branson has been forced to inject $11m into the satellite-launch company after the business failed to raise funding from other sources.
The cash injection will fund the redundancies of 675 staff and remaining employees will work on winding down the business.
The loan from Sir Richard grants the billionaire rights over the company’s Boeing 747 aircraft and other assets if it goes bankrupt.
Chief executive Dan Hart told staff the company had “no choice but to implement immediate, dramatic and extremely painful changes”, CNBC reported.
Funding negotiations with a potential buyer, Matthew Brown, collapsed last weekend.
Mr Hart is making last ditch efforts to secure a rescue deal, according to the Financial Times.
It marks a rapid unravelling for the business, which in January completed a high-profile - though ultimately unsuccessful - launch from Cornwall. The failure led to a collapse in the company’s share price.
Virgin Orbit temporarily suspended operations earlier this month while it sought additional capital.
Shares in US-listed Virgin Orbit, which was once worth $3bn, plunged 44pc in after market trading in the US, valuing it at less than $100m.
Virgin Orbit officially began in 2017 as an offshoot of Virgin Galactic before going public in 2021 through a combination with a blank-check firm.
It aimed to launch small satellites into orbit, distinct from Virgin Galactic’s focus on sending humans to the edge of space and back.
But two of Orbit’s six missions, mostly from the Mojave desert in the US, failed.
Its latest attempt from the UK ended in disaster after the rocket suffered an anomaly and its satellites crashed into the sea.
The business – part of Branson’s empire that includes airline Virgin Atlantic and spaceflight company Virgin Galactic – has not turned a profit as a public company.
With Virgin Orbit on the brink of collapse, Britain’s space ambitions have been thrown into doubt. The space company had been planning up to 17 launches from the UK over the next decade from a rocket port in Cornwall.
The company had received around £9.5m in taxpayer funding from the UK Space Agency for the failed mission in January.
The Long Beach, California-based company is one of several space-related start-ups that have seen their shares plunge as investors shy away from untested business models and money-losing operations.
Astra Space reported Thursday that its cash and cash-equivalent reserves fell by 32pc in the last quarter of last year.
Rocket Lab USA said last month it expects its quarterly loss to be three times bigger than analysts had estimated.