Virgin Orbit Halts Operations, Furloughs Staff As It looks For Funding: Report

Satellite launch company Virgin Orbit is reportedly halting its operations and furloughing nearly all its employees while it looks for funding to solve its financial crisis.

A company spokesperson said it will initiate an operational pause from Thursday and would give an update on go-forward operations in the coming weeks, CNBC reported.

The news of unpaid furlough was communicated to the staff during an all-hands meeting Wednesday. Meanwhile, a small team of employees will continue to work and staff can cash in their paid time off (PTO), people who attended the meeting told the outlet.

Virgin Orbit CEO Dan Hart reportedly told the staff the new decision was intended to give more time for the company to finalize a new investment plan to solve its financial troubles.

Virgin Orbit, founded by British billionaire Richard Branson, faced a setback in January after one of its missions failed midflight as it could not launch the vehicle to the target orbit, causing the rocket to crash into the ocean.

Although the failure came after four consecutive successes of Virgin Orbit's air-launch system, it impacted the company's business and aggravated its already existing financial struggles.

The spokesperson said Wednesday the company had already made modifications in the next production based on the learnings from the failed mission.

"Our investigation is nearly complete and our next production rocket with the needed modification incorporated is in the final stages of integration and test," the spokesperson added.

According to its third-quarter reports in November 2022, the company was at an operating loss of $50.5 million with $71 million of cash on hand.

Since the fourth quarter, Virgin Orbit brought in funds in the form of debts — $25 million in an unsecured convertible note and $30 million in senior secured convertible notes from Branson's Virgin Group with interest rates as high as 12%.

Following the news of the operational halt, shares of Virgin Orbit fell about 33% in after-hours trading after it closed at $1.01 a share Wednesday.

Hart was scheduled to attend a panel discussion on launch options for smallsats at the Satellite 2023 conference Tuesday but did not appear, Space News reported.