The race towards it space already makes the first victims: Virgin Orbit, the company created by British billionaire Richard Branson has not found the necessary funds to continue its activities. As a result, the company will cease operations "for the foreseeable future" and lay off nearly all of its workforce (85% of staff) to cut costs. This was revealed by CEO Dan Hart to employees during a meeting on Thursday, March 30. But the crisis of Virgin Orbit sinks the title on the New York Stock Exchange (-40%).
The announcement comes weeks after Virgin Orbit suspended operations, putting staff on layoffs, to sort out its finances. The company had also issued a senior convertible bond, guaranteed for a nominal amount of 10,9 million dollars by Virgin Investments (the Branson company that controls 75% of the rocket manufacturer's capital). She managed to raise $55 million but still failed to plug her financial holes. In the third quarter of 2022 alone, the company reported a loss of $43 million.
Therefore, the agreement with would also have failed Matthew Brown, a Texan venture capital operator, willing to invest 200 million through a placement of private shares.
The crisis of Virgin Orbit
Virgin Orbit was founded in Long Beach, California in 2017 as a spinoff of the company space by Branson, Virgin Galactic. The company produced rockets designed for launching small satellites. In January, an attempt was made to launch the first satellite from British soil, but the mission failed. The rocket managed to get the satellite to the required height, but it crashed soon after.
“Unfortunately we have not been able to obtain the necessary funding to guarantee a clear path for this company. We have no choice but to implement immediate, dramatic and extremely painful changes,” Hart said on the call.
What will happen to the employees?
The company will eliminate all but 100 positions, and the layoffs will affect all teams and departments. In a document, the company stated that i layoffs they will concern 675 positions, equal to about 85%.
Virgin Orbit “will provide a liquidation package for every employee who leaves,” Hart said, with a cash payment, extended benefits and support in finding a new position – with a “direct pipeline” created with sister company Virgin Galactic.
In addition, Virgin Investments will invest $10,9 million to cover Virgin Orbit's costs related to severance payments and other liquidation expenses. The total cost it should be around $15 million.
Virgin Orbit in crisis: is the Italian dream fading?
The British billionaire's company was interested in launching satellites from Apulian spaceport of Grottaglie. About a month ago, the top management of Virgin Orbit and the Italian delegation made up of Enac, the Italian Space Agency, Aeroporti di Puglia and ARTI Regione Puglia met in California. The will to sign the confidentiality agreement and the letter of intent as soon as possible for the exchange of information and the launch of the feasibility study and industrial investments had been confirmed. But the Virgin Orbit crisis fades the Italian dream of launching satellites from the Grottaglie spaceport.
