Virgin Orbit Temporarily Ceases Operations and Lays Off 90% of Workforce Due to Funding Shortfall

 Virgin Orbit is set to temporarily cease operations after failing to secure the necessary funding to continue. The announcement was made by CEO Dan Hart during an all-hands meeting on Thursday, where he informed employees that the company would be laying off almost all of its workforce. The company will be reducing staff numbers to just 100, resulting in a loss of around 90% of its workforce. The layoffs will affect all teams and departments, with every departing employee receiving a severance package, which includes cash payments, benefit extensions, and support in finding new positions. The CEO also noted that a "direct pipeline" would be established with sister company Virgin Galactic for hiring. Shareholders reacted negatively to the news, with shares dropping over 40% in extended trading.

Hart said that the choice was made because the business was unable to get the necessary cash to carry on with business as usual. The layoffs would be "perhaps the hardest all-hands that we've ever done in my life," he said, appreciating the team's hard work and dedication while expressing his disappointment in the circumstances.

Photo by: virgin.com

The company had been in talks with investors to secure funding, but unfortunately, the late-stage deal talks had fallen through. Hart had been updating employees daily since Monday, when a scheduled all-hands meeting was postponed at the last minute. He had informed the team of the ongoing discussions with investors, stating that leadership would provide updates "as quickly and transparently as we can."

Virgin Orbit started some work on March 22 with a small staff, following an operational pause and furlough that began on March 15. During the hiatus, the business was investigating the mid-flight failure of its previous launch and prepping for its next rocket.

Despite the current situation, Hart remained supportive of the team, stating that he would continue to support them, whether they remain with the company or not. He also confirmed that the company would provide support to all departing employees, including a cash payment, extension of benefits, and assistance with finding a new position.

Virgin Orbit is a subsidiary of the Virgin Group, which was created by billionaire businessman Richard Branson. The company was founded in 2017 with the goal of launching small satellites into space using a novel air-launch technology.

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