British billionaire Sir Richard Branson’s space travel company Virgin Orbit has not been able to attract new investment and plans to lay off 85% of its employees, writes the BBC.
The company will cease operations indefinitely. The announcement comes weeks after Virgin Orbit suspended operations to fix its finances. On Thursday, the 30th of March, the value of the company’s shares on the New York Stock Exchange decreased by 44%.
In a filing with the regulator, Virgin Orbit said the decision was made to reduce costs at a time when the company is unable to secure reasonable financing.
The layoffs will affect 675 employees at all levels of the company.
Branson’s investment firm, Virgin Investments, will invest 10.9 million dollars to cover Virgin Orbit’s costs related to severance payments and other severance expenses. The total cost is expected to be around 15 million dollars.
The head of Virgin Orbit, Dan Hart, during a meeting with employees, is said to have indicated that a tough and painful decision must be made in this situation.
Virgin Orbit was founded in 2017 and is part of Branson’s business empire. The company produced rockets designed to launch small satellites. In January, an attempt was made to launch the first satellite from British soil, but the mission failed. The rocket managed to bring the satellite to the required height, but immediately after that, it fell.
The mission was seen as a major step forward in British space exploration.
In early March, Virgin Orbit reported an outage and hoped to be able to report a resumption of operations soon.