Virgin Orbit to stop paying employees as it races to secure funding
SIR RICHARD BRANSON’S Virgin Orbit has admitted it is close to running out of money as it told staff they will stop being paid within days.
The rocket launch company, which in January led a botched mission to fire satellites into orbit from the UK, is racing to shore up its finances and said yesterday that it was in discussions over potential sources of funding.
“There can be no assurance that these discussions will result in any transaction,” the company said and added that it expects to pause operations for at least a week.
The majority of staff are expected to go without pay from next week, although a small number will be kept on to handle critical functions, a source said. Virgin Orbit will cease operations until it finds funding.
The company provided the rocket for the failed effort to reach orbit from a spaceport in Cornwall, which would have been a UK first. Dan Hart, Virgin Orbit’s chief executive, told staff that withdrawing their pay and placing them on furlough would give the company extra time to secure more investment, Bloomberg reported.
“Virgin Orbit is initiating a companywide operational pause, effective March 16 2023, and anticipates providing an update on go-forward operations in the coming weeks,” a spokesman said.
CNBC first reported the furlough plan.
Shares more than halved in afterhours trading amid doubts over the future of the business and Virgin Orbit’s
struggles cast fresh doubt over Britain’s efforts to become a space power.
The company, which is based in the United States, had planned more than a dozen UK launches from Cornwall. Virgin
Orbit uses a converted Boeing 747, known as Cosmic Girl, to carry a rocket to high altitude before firing it from under its wing space.
The first planned launch faced regulatory hurdles, pushing it back from the summer of 2022 to the new year.
The mission ultimately ended in failure after a part of Virgin Orbit’s rocket malfunctioned, ending its boost early and causing the total loss of the payload.
Thousands of people had gathered to watch the launch and Virgin Orbit initially declared it a success before swiftly admitting the rocket had suffered an “anomaly”. The operation had carried several small satellites from UK start-up companies whose payloads burnt up.
The failure is being investigated by the Space Accident Investigation Authority in the UK and the Federal Aviation Authority in the US.
A Virgin Orbit spokesman said: “On the ops side our investigation is nearly complete and our next production rocket, with the needed modification incorporated, is in the final stages of integration and test.”