virgin orbit is ceasing operations «for the foreseeable future» after failing to secure a funding lifeline, CEO Dan Hart told employees during a general meeting Thursday afternoon, and will lay off about 90% of its workforce. .
“Unfortunately, we have not been able to secure the funding to provide a clear path for this venture,” Hart said, according to audio of the 5 p.m. ET meeting obtained by CNBC.
Hart has been providing brief daily updates to company employees since Monday, when Virgin Orbit delayed a scheduled general meeting at the last minute to Thursday. Final-stage deal talks had fizzled out with a couple of investors over the weekend, but Hart told staff Monday that «very dynamic» investment discussions were continuing.
Those discussions with investors continued this week, with Hart saying leadership would share any updates «as quickly and transparently as we can,» noting that the email leak «is against company policy,» according to the copies. from Hart’s emails from Tuesday and Wednesday obtained by CNBC.
This week, the company has been steadily getting more of its 750+ employees back from the operational hiatus and furlough that began on March 15, after initially resume some work with a “small team” March 22nd. Amid the broader hiatus, Virgin Orbit has been working to finalize its investigation into the mid-air failure of its previous launch, as well as finalizing preparations for its next rocket.
A representative for Virgin Orbit did not immediately respond to CNBC’s request for comment.
Virgin Orbit shares closed at 34 pence a share on Thursday, after falling 82% since the start of the year.
Virgin Orbit developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the plane’s wing mid-flight. But the company’s last mission suffered a mid-flight failurewith a problem during launch that caused the rocket to miss orbit and crash into the ocean.
The company has been looking for new funding for several monthswith majority owner Sir Richard Branson is not willing to further finance the company.
Virgin Orbit parted ways with Branson’s galactic virgin in 2017 and counts the billionaire as its largest shareholder, with 75% ownership. Mubadala, the Emirati sovereign wealth fund, has the second largest stake in Virgin Orbit, at 18%.
The company has hired bankruptcy firms to come up with contingency plans in case it can’t find a buyer or investor. Branson has first priority over Virgin Orbit’s assets, as the company raised $60 million in debt from Virgin Group’s investment arm.
The same day Hart told employees that Virgin Orbit was pausing operations, his board of directors approved a “golden parachute” severance plan for top executives, should they be fired “following a change in control.” of the company