Virgin Orbit has announced that it will lay off approximately 85% of its workforce due to its inability to raise new capital.
The company’s shares, which are controlled by Richard Branson’s Virgin Group, dropped 38 percent in after-hours trading.
Virgin Orbit stated in a regulatory filing that approximately 675 employees will be laid off and that the company expects to incur charges of approximately $15 million.
The move resulted from “the company’s inability to secure meaningful funding,” according to the filing.
Virgin Orbit went public via a blank-check deal in 2021, raising $255 million less than anticipated. In addition to the recent failure to secure funds, the January failure of a rocket launch added to the company’s pressure.
Reuters reported last week that Texas-based Matthew Brown was negotiating a $200 million investment in the company. Monday, two unidentified individuals familiar with the discussions told Reuters that the negotiations had failed.
Last week, following Brown’s appearance on CNBC, Virgin Orbit released a statement in which it “notes the comments made by Matthew Brown in relation to the company,” and added that it was in investment discussions with potential partners but declined to comment further. Monday, Brown declined to comment.
According to securities filings, Branson’s Virgin Group has provided $50 million in financing to the satellite launch company since November in the form of debt secured against its equipment and other assets in the event of bankruptcy.