Virgin Orbit shuts down after failing to gain more funds

In an all-hands meeting Thursday afternoon, Virgin Orbit CEO Dan Hart told employees the bad news we had been expecting for a few days. The company will be laying off most of its workforce and cease operations due to a failure to gain funding.

Virgin Orbit fails last-second funding options

According to an SEC filing, Virgin Orbit will lay off 675 positions, about 85% of the company. The company will leave about 100 employees on staff to continue vital operations, but Hart said in the meeting with employees that it is shutting down “for the foreseeable future.”

The company is supporting its employees with severance packages, benefits, and help in searching for new jobs. Virgin Orbit is even setting up a direct line to jobs at its sister company Virgin Galactic which seems to be on better financial ground (somehow?).

Over the weekend, a deal with an individual named Mathew Brown of Texas fell through at the last second. It would have provided Virgin Orbit with about $200 million of funds and made Brown the company’s majority owner. Brown even talked about the deal on CNBC it got so far, or he was over-excited about making his break in the space industry. In updates to the company, Hart stated they were in several other conversations, but it looks like none of those developed into anything useful.

Richard Branson gives Virgin Orbit one more loan

In the latest SEC filing, Virgin Orbit announced a $10.7 million loan from Virgin Investments Limited, the investment division of Virgin Group, at a 12% interest rate. Over the last few months, Virgin Orbit has raised several rounds of funding from VIL to continue operations. Still, it eventually stopped and told the company to find money elsewhere, which started this process.

Because of these loans, VIL will have first dibs on any of Virgin Orbit’s assets, noting a particular interest in its 747 aircraft used to carry the LauncherOne rocket to altitude before dropping and launching to space. The company’s future is unknown, except we will likely not see another LauncherOne rocket fly unless an investor comes forward to resurrect the company.

Virgin Orbit was one of the few companies to launch a privately funded rocket into orbit. In total, it launched six LauncherOne rockets, with four ending up being successful, a pretty good record compared to other companies still operating.

The final loan from VIL will help cover employee severance costs, which will cost about $15 million.