According to CNBC’s Michael Sheetz, Virgin Orbit will be shutting down and furloughing its employees for at least one week while it looks for funding to continue operations.
The Richard Branson company that operates a small lift air launch rocket called LauncherOne is pausing operations, according to CNBC. All of its employees, except for a small team, will be furloughed and unpaid. However, employees will receive one more paycheck this Friday and can cash out their PTO hours.
The news comes just over two months after the company suffered an inflight failure of its rocket on its first-ever mission out of the United Kingdom. This was the company’s fifth flight and first operational failure. A preliminary investigation update shared that the mission had nominal first-stage burn, staging, and fairing separation, but the second-stage engine shut down prematurely.
The last information we had was that the investigation team, which included several government agencies from the US and UK, was looking to replicate the issue. The company has been quiet on the launch investigation since then but has remained active on social media meaning this might have been a recent decision.
$60 million from Branson in recent months
With a slow launch rate since coming online in 2021 and the recent failure, the company has had to go to Virgin Investments several times since November for additional cash. More funds were paid to Virgin Orbit in December, January, and March. The funding given to the company by Branson’s Virgin Investments would give it the right to all assets if Virgin Orbit were to fold.
As of December 2022, Virgin Orbit had only $70 million in cash or cash equivalents and, with another failure, is most likely facing a much longer wait for more cash to come in than expected.
Virgin Orbit is a publicly traded company after merging with a SPAC back in 2021. Currently, the company’s stock is trading below $1, the minimum requirement to remain on either of the US’ stock exchanges.
In an all-hands meeting, staff was told to expect an update by next week, Wednesday or Thursday.