Virgin Orbit cuts 85% of workforce after failing to secure fresh funding

theguardian.com:

Virgin Orbit, the satellite launch company founded by the billionaire Sir Richard Branson, is slashing 85% of its workforce after failing to secure fresh funding, raising fears that the firm may be on the brink of collapse.

The California-based company said in a US filing that about 675 staff would lose their jobs as part of efforts to cut costs, leaving about 100 employees to run what was left of the business. This was because of an “inability to secure meaningful funding”, the filing explained.

Its chief executive, Dan Hart, is making last-ditch efforts to clinch a deal with financial investors but told staff on Thursday that the company would halt operations indefinitely, according to the Financial Times.

Virgin Orbit had already paused operations and put staff on furlough earlier this month as it tried to secure a funding lifeline.

Branson has reportedly pledged to inject almost $11m (£9m) to cover severance payments for workers, covering most of the $15m costs the company is set to incur as a result of the job cuts. The majority of axed staff are expected to be let go by Monday. “Those impacted are located in all areas of the company,” Virgin Orbit said.

The latest pledge brings Branson’s investments in the venture to more than $70m over the past four months, having put forward a further $5m to support the company only weeks earlier.

Virgin Orbit’s US-listed shares were down almost 50% in pre-market trading, having already closed lower by 16%.

The job cuts come two months after Virgin Orbit – which was founded by Branson and is 75% owned by Virgin Investments – failed in its mission to launch the first satellite from UK soil in January. The company said the botched launch, which was meant to be a historic moment for the