Virgin Orbit Holdings Inc., the Long Beach satellite-launch company tied to British billionaire Richard Branson, is ceasing operations indefinitely, succumbing to growing cash-crunch pressures that have paralyzed startups in many emerging technologies.
The company said in a filing this week that it was cutting 675 jobs, or about 85% of its workforce, “in order to reduce expenses in light of the company’s inability to secure meaningful funding.” A spokesperson for Virgin Orbit said the remaining 15% of employees will work on winding down the business.
The move punctuates a rapid fall after its high-profile launch failure in January and a collapse in its stock price. Virgin Orbit temporarily suspended operations earlier this month while it sought additional capital. The firm — part of Branson’s empire that includes airline Virgin Atlantic and spaceflight company Virgin Galactic Holdings Inc. — hasn’t turned a profit as a public company.
Virgin Orbit shares fell 45% in extended New York trading as of 7:20 p.m. Thursday, March 30, trading at just 19 cents each. The stock was worth more than $7 a year ago. Charges will amount to about $15 million, consisting primarily of $8.8 million in severance pay and employee benefits, and $ 6.5 million in other costs such as outplacement services, Virgin Orbit said in the filing.
Just two weeks ago, the company approved a severance plan for top executives, with Chief Executive Officer Daniel Hart standing to collect a payout of twice his base compensation, a cash payment equal to the pro-rated annual target bonus, as well as as much as six months of health insurance cover.
Branson injected $10.9 million by buying a note convertible into shares through his Virgin Investments Ltd., allowing the failed business to fund severance pay and other costs, Virgin Orbit said in the filing.
Business sale
The Long Beach company is one of several space-related startups with once high-flying valuations that have seen their…
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