Richard Branson’s Virgin Orbit to lay off staff and cease operations after failing to secure new investment
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Virgin Orbit, a rocket company owned by British billionaire Sir Richard Branson, will lay off 85% of its staff after failing to secure new investment. The company will also cease operations in the near future, weeks after it suspended operations in an effort to stabilise its finances.
Earlier this year, a Virgin Orbit rocket failed to complete the first ever satellite launch from UK soil. And now, Thursday after-hours trading in New York saw the company’s stock fall by more than 44%, reported the BBC.
In a US regulatory filing, Virgin Orbit said it made the decision "in order to reduce expenses in light of the company’s inability to secure meaningful funding." This means, the layoffs will impact approximately 675 employees who "are located in all areas of the company."
It said Sir Richard’s investment firm Virgin Investments has injected $10.9 million (£8.8 million) into Virgin Orbit "to fund severance and other costs related to the workforce reduction". Virgin Orbit said it expects payments to laid off staff and other costs to total around $15 million.
According to CNBC, which first reported the news, said this comes amid media reports that the company’s boss has told staff the firm will suspend its activities until further notice. Virgin Orbit chief executive Dan Hart said at a meeting with employees: "We have no choice but to implement immediate, dramatic and extremely painful changes.”