Virgin Orbit to halt operations, furlough nearly all employees
Richard Branson’s Virgin Orbit, a subsidiary of Virgin Group, is going to furlough nearly all its employees and put a pause on its operations for a week starting Monday, as per a report by Reuters.
The satellite launch company, apparently undergoing a major financial crunch, wants the time to finalize a new investment plan to pull the company out of economic gutters. The company is said to have suffered a major setback after its failure to launch nine small satellites into lower Earth orbit in January this year.
In a statement released in January, shortly after the failure of the launch, the company said, “Though the mission did not achieve its final orbit, by reaching space and achieving numerous significant first-time achievements, it represents an important step forward.”
Virgin Orbit shares fell about 33% in after-hours trading from its Wednesday close of $1.01 a share, reported CNBC. The stock has slid steadily from its debut of nearly $10 a share in December 2021.
Furlough will be unpaid
The top bosses briefed the staff on Wednesday about the dire situation. According to the people who were at the briefing, it was announced that the furlough would be unpaid, though employees have the option of cashing in paid time off (PTO). Only a small team will continue to work at the offices, while the company will move up the payroll by a week to Friday.
Speaking to Reuters, the company confirmed the pause in operations but did not give details on the furloughs.
According to the report by CNBC, Virgin Orbit reported third-quarter results in early November, disclosing cash on hand at $71.2 million, $30.9 million in revenue, and an adjusted EBITDA loss of $42.9 million. Its parent company, Virgin Group, made a $25 million investment on November 4. Virgin Group further raised $20 million and $10 million in December and February, respectively.
The company is yet to announce its fourth-quarter 2022 results.
The company even investigated the failed attempt to perform the first-ever rocket launch from UK soil last month. The investigation concluded that a damaged fuel filter destroyed the mission, which could have been a historic rocket launch.
Tesla plans to maintain a delicate balance by opening up its network just enough to draw in federal money but not its customers' scorn. Will that work?