Proactive Investors - Billionaire entrepreneur Richard Branson’s satellite-launching company Virgin Orbit Holdings Inc (NASDAQ:VORB) has announced an 85% workforce reduction after failing to secure funding
The news comes two weeks after the group announced a pause on operations in an attempt to shore up finances. Net losses in the most recent quarterly update exceeded US$43mln.
Virgin Orbit estimates that it will incur a further US$15mln (£12.1mln) in costs related to the reduction, comprising US$8.8mln in severance payments and employee benefits, US$6.5mln in “other costs primarily related to outplacement services”, according to SEC filings.
Workforce reductions are expected to be completed by April 3.
CNBC reported that Virgin Orbit chief executive Dan Hart told employees: "We have no choice but to implement immediate, dramatic and extremely painful changes."
Virgin Orbit has not turned a profit since being spun out of Branson’s Virgin Galactic space-tourism venture in 2017.
In January, the group’s LauncherOne satellite launcher failed in its attempt to conduct the first orbital launch from British soil in what Hart called a “painful” mission anomaly.
Approximately 675 employees will be let go in the restructuring.