As the rocket firm, established by British billionaire Richard Branson, attempts to acquire more money, nearly all of Virgin Orbit’s employees have been advised to suspend activities until at least the week after next.
CNN was informed by a person with knowledge of the situation that employees were informed of the news during a meeting with Virgin Orbit (VORB) CEO Dan Hart on Wednesday afternoon, with instructions to await updates from leadership within the next week.
“From March 16, 2023, Virgin Orbit will initiate a company-wide operational halt,” the business stated in a statement, adding that it will provide an update on future activities in the coming weeks.
CNN confirmed the story, which was initially reported by CNBC, citing anonymous sources.
According to one source, the great majority of workers, with the exception of a small number of necessary personnel such as security guards, will not be paid or go to work for the following week. A source indicated that the company is in “discussions” to seek new capital, despite the absence of a formal agreement.
Virgin Orbit was created in 2017 as a spin-off of its sister firm, Virgin Galactic, which specialises in using supersonic aircraft to transport high-paying visitors to the edge of space. Virgin Orbit, on the other hand, has been developing LauncherOne, an air-launched rocket for transporting tiny satellites into orbit.
The business was an early leader among the hundreds of startups competing to develop lightweight rockets for smallsat launch. The company’s LauncherOne rocket reached orbit for the first flight in January 2021, earlier than the majority of its competitors and after only one failed attempt. The aircraft then successfully performed three additional trips out of California.
The business attempted to launch its first rocket from the United Kingdom in January. This expedition was unsuccessful.
The inquiry into that mission is nearing completion, and our next manufacturing rocket with the necessary modification is in the last phases of integration and testing.
Prior to Wednesday’s meeting, a source told CNN that management had been pressuring employees to preserve cash and reduce expenditures.
Virgin Orbit stated in the fall of 2021 that it would go public via a reverse merger arrangement known as a SPAC. In its most recent quarterly financial report, published in November, the company reported $50 million in negative cash flow.
According to public documents, the company has received more funding from Branson’s family office, Virgin Group, over the previous few months.
Wednesday’s after-hours trading saw the company’s stock lose more than 30% of its value after falling over 5% during regular market hours. The stock was worth less than 70 cents a share at the time.