This file screen grab taken from AFPTV video on April 25, 2022 shows British tycoon Richard Branson speaking via a video call in Singapore from his home in the British Virgin Islands. In after-hours trade, shares of Virgin Orbit Holdings, controlled by Richard Branson's Virgin Group, fell 38 percent. PHOTO AFP Rocket maker Virgin Orbit Holdings has laid off 85 percent of its staff because it hasn't been able to raise new investment.
The company's shares fell 38 percent in after-hours trade, as it was controlled by Richard Branson's Virgin Group.
The company expects to take related charges of $15 million, according to a regulatory filing by Virgin Orbit. About 675 employees will lose their jobs.
The filing said that the company's inability to secure meaningful funding was a cause of the move.
In 2021, Virgin Orbit went public through a blank-check deal, where it raised $255 million less than expected. The January failure of a rocket launch increased pressure on the company, as well as the failure to raise funds.
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Last week, Reuters reported that Texas-based Matthew Brown had been in talks to invest $200 million in the company. Two people familiar with the discussions who asked not to be identified told Reuters on Monday that the talks collapsed.
Virgin Orbit said last week in a statement after Brown appeared on CNBC, it noted comments made by Matthew Brown in relation to the company, and added that it was in investment discussions with potential partners but wouldn't comment further. Brown didn't want to make a statement on Monday.
Since November, Branson s Virgin Group has provided $50 million in financing to the satellite launch company in debt secured against its equipment and other assets in the event of a bankruptcy, according to securities filings.
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On March 15 Virgin Orbit sacked nearly all of its 750 employees in an operational pause, while the company sought a financial lifeline that would allow it to focus on rocket design improvement.
A group of employees returned to work on March 23 to focus on rocket engine work, an email to staff said at the time.
The company expects layoffs to be completed by April 3.