Long Beach's Virgin Orbit lays off 675 people, 85% of its workforce
Published in Business News
Richard Branson's Virgin Orbit is laying off about 675 employees, or 85% of its workforce, as the air-launched rocket company failed to find funding to sustain its operations.
The Long Beach company plans to spend $8.8 million in severance payments and employee benefit costs, and an additional $6.5 million on outplacement services and other related costs, according to a company filing Thursday with the U.S. Securities and Exchange Commission.
To fund the severance and outplacement costs, Virgin Orbit sold a $10.9 million senior secured convertible note to Virgin Investments, the investment arm of Branson's Virgin Group, according to the filing.
The layoffs will be "substantially" complete by Monday.
Virgin Orbit did not immediately respond to a request for comment.
The layoffs come just about two weeks after the company said it would pause operations and put most of its staff on furlough while it looked for additional cash.
Virgin Orbit faced a tough market for fundraising, with higher interest rates and greater reluctance from investors to fund tech that wasn't a sure-fire win. Other small-satellite launch companies have also faced financial struggles this year, including Alameda-based Astra, which received a delisting warning from the NASDAQ late last year for having a share price below $1 for 30 consecutive days.
Virgin Orbit had hoped for a lifeline from private investor Matthew Brown, but talks between the two broke down late last week, according to CNBC.
The company launches small satellites via a rocket that blasts off from beneath the wing of a modified Boeing 747 aircraft. Virgin Orbit had four successful launches before a failure earlier this year that resulted in the loss of its customers' satellites.
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