Virgin Orbit told nearly all of its staff to cease operations until at least next week as the rocket company, founded by British billionaire Richard Branson, works to secure additional funding.
Workers were told the news during a meeting with Virgin Orbit (VORB) CEO Dan Hart on Wednesday afternoon with direction to await updates from leadership within the next week, a source familiar with the matter told CNN.
“Virgin Orbit is initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks,” the company said in a statement.
The news, which first reported by CNBC, citing anonymous sources, was confirmed to CNN.
One source familiar said that the vast majority of workers except for a lean staff of essential employees, such as security guards, will not be paid or come into work for the next week. Though no deal for additional funding has been solidified, the source said the company is in “talks” to secure additional money.
Virgin Orbit was founded in 2017 after spinning off from its sister company, Virgin Galactic, which is focused on using supersonic planes to vault high-paying tourists on joy rides to the edge of space. Virgin Orbit, on the other hand, has been developing an air-launched rocket for hauling small satellites to orbit, dubbed LauncherOne.
The company was an early leader among dozens of startups vying to build lightweight rockets for launching smallsats. The company’s LauncherOne rocket reached orbit for the first time in January 2021 after only one failed attempt and earlier than most of its competitors. It then completed three more successful missions out of California.
But in January, the company attempted to launch its first rocket from the United Kingdom. That mission ended in failure.
An investigation into that mission “is nearly complete and our next production rocket with the needed modification incorporated is in final stages of integration and test. “
One source told CNN that leading up to Wednesday’s meeting, management had been pressing workers to conserve cash and cut down on purchases.
Virgin Orbit announced it was going public — via a reverse merger agreement called a SPAC — in the fall of 2021. In its latest quarterly financial filing, posted in November, the company reported negative cash flow to the tune of $50 million.
Over the past few months, the company had been receiving additional financial backing from Branson’s family office, called Virgin Group, according to public filings.
The company’s stock, down nearly 5% during trading hours, shed more than 30% of its value at one point during after hours trading on Wednesday. At the time, its stock was valued at less than 70 cents per share.