Virgin Orbit makes most of its staff redundant amid funding crisis

The satellite comms arm of Richard Branson’s eclectic empire, Virgin Orbit, has laid off the bulk of its staff due to an inability to secure more funding.

CEO Dan Hart told employees during an all-hands meeting yesterday that the firm will cease operations for the foreseeable future after failing to secure funding, according to CNBC who managed to get its hand on the audio from the meeting.

“Unfortunately, we’ve not been able to secure the funding to provide a clear path for this company… We have no choice but to implement immediate, dramatic and extremely painful changes,” said Hart adding that this would be “probably the hardest all-hands that we’ve ever done in my life.”

“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.”

According to an SEC filing, Virgin Orbit will drop around 675 employees, something like 85% of its workforce ‘in order to reduce expenses in light of the Company’s inability to secure meaningful funding. Those impacted are located in all areas of the Company.’

Earlier this month employees were told they would be furloughed without pay with Virgin Orbit ceasing operations for a week to conserve capital while the company was discussions with potential funding sources. It seems those discussions didn’t come to anything, which wouldn’t have left management with many options.

There have been money problems at the firm for a while – its third quarter numbers showed an adjusted EBITDA loss of US$42.9 million on revenues of $30.9 million, and while the firm put a positive spin on things, soon after this its mission to launch the first satellites from the UK ended in failure.  

In January, after taking off from the runway at Spaceport Cornwall, Virgin Orbit’s Cosmic Girl – a customized 747 that served as the LauncherOne system’s carrier aircraft – successfully released a rocket into space, however at some point during the firing of its second stage engine the system experienced an anomaly, the rocket was shutdown, and the satellites never made orbit.

It’s presumably a very fiddly thing putting satellites in space, to say the least, perhaps even more so doing it via a converted 747. Considering the problem appears to be investor confidence, it must be hard for the firm to not wonder what situation they would be in had that mission managed to thread the needle and successfully deploy its satellites, giving Virgin Orbit the PR win it was clearly after by breaking barriers for UK space exploration.

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