Virgin Orbit, Richard Branson's Satellite Launch Company, Halts Operations

The company plans to lay off approximately 85 percent of its workforce.

Virgin Orbit, a sister company of Branson's Virgin Galactic, is ceasing operations and laying off the majority of its staff after failing to secure adequate funding, according to The Washington Post. Virgin Orbit publicly disclosed on Thursday that roughly 85 percent of its employees, or about 675 people, would be affected.

CEO Dan Hart announced the "immediate, dramatic, and extremely painful changes" during a company-wide call, as reported by CNBC. Following the announcement, Virgin Orbit's stock plummeted by 39 percent, with shares trading at a mere 20 cents.

Established in 2017 as a spin-off from Virgin Galactic, Virgin Orbit focused on satellite and space-launch systems, while its sister company aimed to send tourists to space. In 2021, the company went public with a valuation of $3.7 billion. However, it has only experienced financial losses since then, with a net loss of $43.6 million and a revenue of $30.9 million in the third quarter of 2022.

In addition to financial struggles, Virgin Orbit faced challenges in achieving its mission. The company conducted four successful orbital flights from California's Mojave Desert in 2021 and 2022, but its first UK orbital launch attempt in January failed to reach orbit due to a malfunctioning fuel pump filter that caused an engine to overheat.

Virgin Orbit's decision to shut down operations follows an "operational pause" on March 16, aimed at saving money and exploring options to sustain the company. However, due to the layoffs, the company will incur an additional loss of around $15 million in severance payments and other WARN Act-related expenses, a law governing mass layoffs.