Sir Richard Branson's Virgin Orbit rocket company is laying off 85 per cent of its staff. Reports suggest it is also ceasing also operations for the foreseeable future.
The company is reportedly struggling to secure new funding for future projects. It follows a failed attempt to complete the first ever satellite launch from UK soil earlier this year after it launched from Cornwall.
A public document shows that around 675 staff members will lose their jobs by the end of next week. Those losing their jobs "are located in all areas of the company".
It confirmed the move was made to “reduce expenses in light of the company’s inability to secure meaningful funding". The company's shares plummeted by more than 44 per cent in after-hours trading in New York on Thursday.
The document said that Virgin Investments has pumped $10.9m (£8.8m) into Virgin Orbit "to fund severance and other costs related to the workforce reduction". The whole redundancy package is expected to cost around $15m.
Employees were also reportedly that operations were ceasing for the time being: "We have no choice but to implement immediate, dramatic and extremely painful changes," Virgin Orbit chief executive Dan Hart said at a meeting with employees, according to CNBC, which first reported the news.
Virgin Orbit was founded in 2017 after spinning off from its sister company, Virgin Galactic. While Virgin Galactic focused on taking people as space tourists, Virgin Orbit focused instead on an air-launched rocket, named LauncherOne, for hauling small satellites to orbit.
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After a series of successful test launches, the company's first rocket launch from the UK, out of Spaceport Cornwall, ended in failure. The Start Me Up mission saw an “anomaly” during the flight, with the rocket - which contained nine small satellites - failing to orbit.
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,” a Virgin Orbit spokesperson said in a March 15 statement. The plane that launched the rocket returned safely.
There are fears that the failure has eroded confidence in the British space and rocket industry, putting off investors.
