Virgin Orbit cuts 85 percent of jobs and ‘stops operations for now’

Aerospace company Virgin Orbit is suspending all activities for the time being after the company was unable to raise sufficient investments. In addition, 85 percent of jobs will be cut and about 100 people will remain with the company. In January, a major rocket launch failed.

Virgin Orbits CEO Dan Hart has told staff that operations will be suspended for the time being, according to a recording shared with CNBC. “Unfortunately, we have been unable to secure funding for a clear path from the company,” Hart says in the recording. “We have no choice but to implement immediate, dramatic and extremely difficult changes.”

Company reports to government agency SEC that some 675 jobs will be cut, or 85 percent of the number of jobs. Hart says he wants to support employees and, for example, help them find a job at sister company Virgin Galactic, and give them a severance bonus. For that bonus, the company sold $10.9 million in stock to investment firm Virgin Investments Limited. The three companies are part of Richard Branson’s Virgin Group.

Virgin Orbit wanted to launch rockets from a flying, modified Boeing 747. In January, the company wanted to launch satellites from Western Europe for the first time. That worked well on missions in North America, but on the European flight, the first upper stage ignition was prematurely terminated. The nine satellites were lost in the process.

In mid-March, the company had already halted its activities for a week while it looked for financing. Last week, according to Hart, the company had ‘very dynamic’ talks with potential investors, but they apparently did not want to invest in the company in the end. Virgin Orbit is a separate company from Virgin Galactic, which offers space tourism.