Richard Branson's Virgin Orbit rocket company ceases operations for a week, seeks additional funding

CNN

Virgin Orbit instructed its employees to stop operations by next week, as the rocket company founded by Richard Branson in Britain seeks additional funding.

According to CNN, a source familiar said that workers were informed the information by Dan Hart, CEO of Virgin Orbit (VORB), on Wednesday afternoon. He also instructed them to wait for updates from the leadership within the next week.

"Virgin Orbit" announced that it would be instituting a company-wide operation pause effective March 16, 2023. The company also anticipates giving an update on go forward operations in the next weeks.

CNN confirmed the news that was first reported by CNBC citing anonymous sources.

According to a source, the majority of employees will not be paid, except for security guards and other essential staff, who are unlikely to come into work the week after. Although no agreement has been reached for additional funding, a source claimed that the company is still in talks to obtain additional funds.

Virgin Orbit was established in 2017 following the spin-off of Virgin Galactic, its sister company. Virgin Galactic is focused on supersonic planes that take high-paying tourists on thrill rides to the edge. LauncherOne, Virgin Orbit's air-launched rocket that transports small satellites into orbit has been developed by the company.

This company was a leader among the dozens of startups that were trying to create lightweight rockets for small satellite launches. After only one failure, the LauncherOne rocket was in orbit in January 2021. This was faster than any of its competitors. The rocket then went on to complete three more successful missions from California.

However, in January, the company tried to launch its first rocket out of the United Kingdom. The mission was unsuccessful.

The investigation into this mission is almost complete. Our next production rocket with the modification required is currently in the final stages of integration.

CNN was told by a source that management had been pressuring workers to cut back on purchases and save cash in the weeks leading up to Wednesday's meeting.

Virgin Orbit announced that it would go public in fall 2021 via a reverse merger agreement (a SPAC). The company posted a November quarterly financial filing that showed a negative cash flow of $50 million.

According to public filings, Branson's family office, Virgin Group, had provided additional financial support for the company over the last few months.

The stock fell nearly 5% during trading hours and lost more than 30% during after-hours trading on Wednesday. Its stock was worth less than 70c per share at the time.