This file screen grab taken from AFPTV video on April 25, 2022 shows British tycoon Richard Branson speaking via a video call in Singapore from his home in the British Virgin Islands. Shares of Virgin Orbit Holdings, which is controlled by Richard Branson's Virgin Group, fell 38 percent in after-hours trade. (PHOTO / AFP)
Rocket maker Virgin Orbit Holdings on Thursday said it was laying off about 85 percent of staff because it had not been able to raise new investment.
Shares of the company, which is controlled by Richard Branson's Virgin Group, fell 38 percent in after-hours trade.
About 675 employees will lose their jobs, and the company expects to take related charges of about $15 million, Virgin Orbit said in a regulatory filing
About 675 employees will lose their jobs, and the company expects to take related charges of about $15 million, Virgin Orbit said in a regulatory filing.
The move was the result of "the company's inability to secure meaningful funding," the filing said.
Virgin Orbit went public in 2021 through a blank-check deal, where it raised $255 million less than expected. In addition to the recent failure to raise funds, the January failure of a rocket launch increased pressure on the company.
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Reuters reported last week that Texas-based Matthew Brown had been in talks to invest $200 million in the company. Those talks collapsed, two people familiar with the discussions who asked not to be identified told Reuters on Monday.
The company expects layoffs to be substantially complete by April 3
Virgin Orbit in a statement last week, after Brown appeared on CNBC, said it "notes the comments made by Matthew Brown in relation to the company," and added that it was in investment discussions with potential partners but declined to comment further. Brown declined to comment on Monday.
Since November, Branson’s Virgin Group has provided $50 million in financing to the satellite launch company in debt secured against its equipment and other assets in the event of a bankruptcy, according to securities filings.
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Virgin Orbit furloughed nearly all its 750 employees on March 15 in what a spokesperson called an "operational pause," while the company sought a financial lifeline that would allow it to focus on rocket design improvement.
A small group of employees returned to work on March 23 to focus on rocket engine work, an email to staff said at the time.
The company expects layoffs to be substantially complete by April 3.