Richard Brandson, a British billionaire, founded Virgin Orbit. It is a rocket company. Based on the news, the company now is struggling to secure additional funding. Thus, they reduced expenses by conducting massive layoffs. In order to secure the funds the company must slash at least 85% of the staff. By April 3, the company will terminate around 675 employees, this is the amount of Virgin Orbit’s workforce. So far, Virgin Orbit’s spokesperson declined to give comments.
Since 15 March, the CEO of Virgin Orbit, Dan Hart has announced to the staff to hold operations. He placed them on a week-long furlough because the company is trying to secure additional funding. Based on the filing, the company will incur around $15 million in charges from ceasing operations. This covers $8.8 million in severance payments plus employee benefit costs. In addition, there are $6.5 million costs related to outplacement services as well as WARN Act exposure. The WARN Act is a U.S. law requiring companies to provide advance notice 60 days prior to layoffs.
As a part of the efforts, the company also sold around $10.9 million convertible note. It is a short-term debt to Virgin Orbin Holdings, Inc owned by Branson’s The Virgin Group. Virgin Orbit was founded in 2017 after spinning off from Virgin Galactic, the sister company. Virgin Galactic focuses on using supersonic planes to vault high-paying tourists. Virgin Orbit on the other hand, develops an air-launched rocket called LauncherOne. LauncherOne is to haul small satellites to orbit. Apparently, it appears among dozens of startups vying to build lightweight rockets to launch smallsats.