Virgin Orbit Lays Off 85% Of Staff In ‘Painful’ All-Hands Meeting – [UPDATED]31st Mar 2023
In an expected turn of events, Virgin Orbit (VO) was unable to secure investors to save the launch company and has now begun laying off almost all of its workforce. In a securities and exchange filing, it said the company would eliminate all but 100 positions, meaning about 675 layoffs will take place – making up for 85% of all its employees.
According to audio from the all-hands VO meeting on Thursday, obtained by CNBC, CEO Dan Hart said the company has “not been able to secure the funding to provide a clear path for this company.” He continued: “We have no choice but to implement immediate, dramatic, and extremely painful changes…This company, this team — all of you — mean a hell of a lot to me. And I have not, and will not, stop supporting you, whether you’re here on the journey or if you’re elsewhere”.
The SEC filing stated severance payments to staff will cost around $8.8 million, and $6.5 million will go into costs related to “outplacement services”. Hart said the company will provide employees with a cash payment, an extension of benefits, and support in securing a new position with Virgin Galactic.
It comes after VO was in talks with multiple potential financial lifelines, like venture capital investor Matthew Brown from Texas, but none came to fruition in time, according to sources who spoke to Reuters.
The surprise move comes after Virgin Orbit’s share price fell by 33% in after-hours trading on Wednesday, 15th March, with the stock continuing to decrease in value well into Thursday, 16th March.
According to Reuters, Texas-based venture capital investor Matthew Brown had plans to invest $200 million in Virgin Orbit. However, the negotiations ended with no reported results, according to two people familiar with the situation who declined to be identified.
Sir Richard Branson’s satellite launch company, Virgin Orbit, has furloughed almost all its staff for at least a week after an ‘all-hands’ meeting on 15th March.
Staff members were told they were to take unpaid furlough for at least a week, while Virgin Orbit seeks further funding to prop up its more-often-successful-than-not LauncherOne rocket, which has already suffered two failures in six satellite-carrying attempted launches.
A UK Space Agency spokesperson told Orbital Today that “This is a commercial matter for Virgin Orbit, and we are engaging regularly with the company to understand next steps.
We recognise that launching into space is an inherently challenging endeavour – that’s why we continue to support multiple projects to make the UK the leading provider of commercial small satellite launch in Europe by 2030, generating jobs and growth in communities across the UK.UKSA spokesperson
Virgin Orbit Pauses All Operations
A spokesperson for Virgin Orbit told Reuters that the company is starting an “operational pause” and will give an “update on go-forward operations in the coming weeks.”
While the company looks for further funding for its LauncherOne project, only a small integral team will continue working, while the rest of the staff will be forced to weather the storm on unpaid furlough.
Although only initially predicted to last a week, this operational pause, combined with a plummeting stock price that dropped to $0.69 as of Thursday 16th March 2023, investors and interested parties are nervous, to say the least; and rightly so.
The apprehension surrounding this latest crisis was further compounded by a last-minute cancellation by CEO of Virgin Orbit, Dan Hart, after being scheduled to appear at a space industry conference in Washington D.C. set for Tuesday, according to the CNBC news channel.
Will LauncherOne Prove to be the Albatross around Branson’s Neck?
Established in 2017, Virgin Orbit is part of entrepreneur Sir Richard Branson’s parent company, Virgin Group, and was created to provide launch services for small satellites.
Virgin Orbit took over the LauncherOne project, which was previously part of Virgin Galactic. The LauncherOne is a rocket designed to be air-launched from a modified Boeing 747 aircraft named Cosmic Girl.
On 25th May 2020, the rocket’s first launch failed to reach orbit. However, on 17th January 2021, LauncherOne became the first Virgin Orbit vehicle to reach orbit, successfully deploying 10 CubeSats for NASA.
Since then, the rocket has enjoyed three successful missions, including delivering its first commercial payload in the summer of 2021. But these achievements were completely overshadowed by the failed launch from the Cornwall Spaceport on 9th January 2023, when the rocket suffered an ‘anomaly’, which forced the aircraft to abort its mission.
The Virgin Orbit bosses now seem to have their tails firmly between their legs, as the rally for funding to boost the rocket’s potential for another launch, as well as to bolster confidence.
Will LauncherOne prove to be Branson’s greatest project yet, or an albatross doomed to bring Virgin Orbit to its knees? Only time, and a big fat cash injection, can tell.
Updated on 31th March.