Virgin Orbit is suspending operations and furloughing staff while it seeks funding
Richard Branson’s Virgin Orbit, with a rocket under the wings of a modified Boeing 747 jet, lifts off from Mojave, California on July 10, 2019 for a major drop test of its high-altitude satellite launch system.
Mike Blake | Reuters
Virgo Orbit is furloughing almost all of its employees and suspending operations for a week to seek a funding lifeline, people familiar with the matter told CNBC.
Company executives briefed employees on the situation in an all-hands meeting Wednesday at 5 p.m. ET, according to meeting attendees. Leave is unpaid, although staff can redeem PTO with only a small team continuing to work. Virgin Orbit is also increasing the payroll by a week to Friday.
In All Hands, company leaders told employees they intend to provide an update on the furlough and funding situation by next Wednesday or Thursday, according to the people, who asked to remain anonymous to discuss internal matters.
Virgin Orbit did not immediately respond to CNBC’s requests for comment.
Virgin Orbit shares are down about 10% in after-hours trading from Wednesday’s close of $1.01 a share. The stock has fallen steadily since its debut of nearly $10 per share in December 2021.
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The rocket-making company has developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket under the plane’s wing mid-flight. But the company’s latest mission suffered an in-flight failure, with a problem during launch causing the rocket to fail to reach orbit and crash into the ocean.
When Virgin Orbit reported its third-quarter results in early November, it reported cash on hand at the end of the quarter of $71.2 million. With $30.9 million in revenue, Virgin Orbit reported an Adjusted EBITDA loss of $42.9 million for the period as the company continues to burn cash.
Since the fourth quarter, the company has continued to borrow through an investment arm of Richard Branson’s Virgin Group. The Company raised $25 million in convertible unsecured notes in November before raising $20 million and $10 million in convertible senior secured notes in December and February, respectively. The debentures give Branson’s parent company “first priority” over Virgin Orbit’s assets.
As of Wednesday, the company was yet to announce when it would release fourth-quarter 2022 results.
https://www.cnbc.com/2023/03/15/virgin-orbit-pauses-operations-furloughs-staff.html Virgin Orbit is suspending operations and furloughing staff while it seeks funding