Virgin Orbit has told almost all of its staff to cease operations until at least next week as the rocket company, founded by British billionaire Richard Branson, scrambles to secure additional funding.
Workers learned the news during a meeting with Virgin Orbit
(SPEECH) CEO Dan Hart on Wednesday afternoon with instructions to expect updates from management over the next week, a source familiar with the matter told CNN.
“Virgin Orbit is entering a company-wide operational pause, effective March 16, 2023, and expects to provide an update on future operations in the coming weeks,” the company said in a statement.
The news, first reported by CNBCciting unnamed sources, was confirmed to CNN.
A familiar source said the vast majority of workers, except for a small number of essential employees, such as security guards, will not be paid or will not work next week. While no additional funding agreement has been reached, the source said the company is in “discussions” to secure additional funds.
Virgin Orbit was founded in 2017 after splitting from sister company Virgin Galactic, which focuses on using supersonic aircraft to ferry high-paying tourists on jaunts to the far reaches of space. Virgin Orbit, on the other hand, has developed an air-launched rocket to carry small satellites into orbit, dubbed LauncherOne.
The company was an early leader among dozens of startups vying to build lightweight rockets for launching small satellites. The company’s LauncherOne rocket reached orbit for the first time in January 2021 after just one failed attempt and earlier than most of its competitors. He then flew three more successful missions out of California.
But in January, the company tried to throw its first UK rocket. This mission ended in failure.
A survey of this mission “is nearing completion and our next production rocket with the necessary modification incorporated is in the final stages of integration and testing.”
A source told CNN that ahead of Wednesday’s meeting, management pressured workers to save money and cut back on purchases.
Virgin Orbit announced it would go public – via a reverse merger deal called SPAC – in the fall of 2021. In its latest quarterly financial report, released in November, the company reported negative cash flow of a amount of $50 million.
In recent months, the company had received additional financial support from Branson’s family office, called Virgin Group, according to public documents.
Shares of the company, down nearly 5% during trading hours, lost more than 30% of their value at one point during trading hours on Wednesday. At the time, its shares were valued at less than 70 cents per share.