- By Annabelle Liang
- business reporter
3 hours ago
Image source, Virgin Orbit
picture description,
Mr Richard Branson
British billionaire Sir Richard Branson’s rocket firm Virgin Orbit says it will lay off 85% of its workforce after failing to secure new investment.
According to media reports, the company will also cease operations for the foreseeable future.
It comes weeks after the company suspended operations in an apparent attempt to shore up its finances.
Earlier this year, a Virgin Orbit rocket failed to complete the first ever satellite launch from British soil.
Shares of the company plunged more than 44% in after-hours trading in New York on Thursday.
In a US regulatory filing, Virgin Orbit said it made the decision “to reduce spending given the company’s inability to secure meaningful funding.”
The layoffs affect about 675 employees who “work in all areas of the company”.
It said Sir Richard’s investment firm Virgin Investments had invested $10.9m (£8.8m) in Virgin Orbit “to fund severance pay and other costs related to the downsizing”.
Virgin Orbit expects payments for laid-off employees and other costs totaling approximately $15 million.
According to media reports, the head of the company has informed the employees that the company will cease its activities until further notice.
“We have no choice but to make immediate, dramatic and extremely painful changes,” Virgin Orbit chief executive Dan Hart said at a meeting with employees, according to CNBC, which first reported the news.
Virgin Orbit did not immediately respond to a BBC request for comment.
The law firm, founded in 2017, has not made any profits as a public limited company.
It develops rockets to transport small satellites and is part of Sir Richard’s business empire, which also includes the airline Virgin Atlantic and the space tourism company Virgin Galactic.
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Watch: Virgin Orbit rocket flies into space
The company’s LauncherOne rocket, launched from the Boeing 747 Cosmic Girl plane, reached space but missed its target orbit.
The mission was billed as a milestone in British space exploration. It was hoped it would take a big step forward towards the goal of making the country a global player – from making satellites to building rockets and creating new spaceports.