Ouch.
Free Falling
Virgin Orbit has announced that it will cut a total of 675 jobs — a staggering 85 percent of its workforce — in a Securities and Exchange Commission filing today.
Earlier this year, Richard Branson’s satellite launch outfit failed to deliver its first satellites into orbit. The setback clearly has cost the company dearly, with it revealing in a regulatory filing earlier this month that it was pausing all work and trying to “conserve capital.”
Shares fell by more than 44 percent in after-hours trading on Thursday, per the BBC, adding insult to injury.
Existential Crisis
In short, the company is facing a deep crisis, expecting to pay out $8.8 million in severance and benefits payments as well as another $6.5 million in other HR-related costs.
“Unfortunately, we’ve not been able to secure the funding to provide a clear path for this company,” Virgin Orbit CEO Dan Hart told employees, as quoted by CNBC. “We have no choice but to implement immediate, dramatic and extremely painful changes.”
Virgin Orbit has struggled to secure funding, especially following its January mishap. According to a February investigation, the rocket’s fuel filter became dislodged during launch, causing it to overheat and triggering malfunctions.
But it’s not all doom and gloom. The company has already successfully launched satellites on four occasions so far for both commercial partners and US defense contractors.
Where the severe job cuts leave the venture remains to be seen — but given the circumstances, the company could soon have its reckoning.
More on Virgin Orbit: Virgin’s Satellite Launch Company Is in Deep Financial Doo-Doo