Virgin Orbit Holdings Inc. is the latest entrant to the list of companies reducing their workforce. According to an SEC filing, billionaire Richard Branson's rocket company will be laying off 85% of its workforce. This series of layoffs will affect 675 Virgin Orbit employees.
As per the filing, Virgin Orbit has attributed these layoffs to its “inability to secure meaningful funding”. The filing said, “On March 30, 2023, the Company announced a workforce reduction of approximately 675 employees, constituting approximately 85% of the Company’s workforce, in order to reduce expenses in light of the Company's inability to secure meaningful funding.”
The Virgin Group subsidiary will incur about $15 million in expenses related to these layoffs, of which, $8.8 million will be spent on employee benefits and severance payments. The parent company provided Virgin Orbit with a capital infusion of $10.9 million to pay these immediate expenses.
This move comes weeks after Virgin Orbit temporarily paused its operations to save finances while it was conducting discussions with potential funding sources and exploring strategic opportunities. According to an audio recording of an all-employee meeting obtained by CNBC, Virgin Orbit CEO Dan Hart said, “We have no choice but to implement immediate, dramatic, and extremely painful changes.”
The company expects to complete layoffs substantially by April 3, 2023.
Earlier this year, the company failed to deploy its ‘Start Me Up’ satellite into orbit after launching it from England’s Cornwall spaceport. In a statement after the launch, Hart said, “The first-time nature of this mission added layers of complexity that our team professionally managed through; however, in the end, a technical failure appears to have prevented us from delivering the final orbit.”
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