The Fall of a Once-Glorious Space Company... Virgin Orbit Lays Off 85% of Its Employees

Decision to Cut Total of 675 Employees Due to Funding Shortage
Repeated Satellite Launch Failures Lead to Investor Neglect

The company 'Virgin Orbit,' which once boldly promised innovation in the aerospace industry, continues to experience an unrelenting downfall.

On the 31st (local time), according to the U.S. Securities and Exchange Commission (SEC), Virgin Orbit submitted a report the previous day stating, "The company has decided to cut 675 employees to reduce costs due to the inability to secure meaningful funding." The 675 employees represent about 85% of the total workforce.

The company explained the expenses related to severance pay and other costs as "expenses related to the cessation or disposal of company operations." The layoffs are expected to be completed by the 3rd of next month.

Bloomberg News quoted a Virgin Orbit spokesperson saying, "The remaining 15% of employees will work on winding down the business." Following this news, Virgin Orbit's stock price plummeted 41.2% in the U.S. stock market that day.

Virgin Orbit is a subsidiary spun off in 2017 from 'Virgin Galactic,' a private space tourism company founded by Richard Branson, the British eccentric billionaire and chairman of the Virgin Group.

Virgin Orbit, which was once valued at $4 billion (approximately 5.24 trillion KRW) when it went public on Nasdaq in 2021 through a merger with a Special Purpose Acquisition Company (SPAC), has since experienced a continuous decline in less than two years.

Virgin Orbit's Boeing 747 aircraft modified for satellite launch
[Image source=Yonhap News]

Virgin Orbit attempted technology that launches rockets carrying satellites into orbit from an altitude of 11,000 to 14,000 meters using a modified Boeing 747 aircraft. To this end, it headquartered in Long Beach, California, and launched aircraft from the nearby Mojave Air and Space Port.

However, the actual number of such launches since 2020 was only six, and two of those ended in failure. In January 2021, the company succeeded in entering satellite orbit for the first time, raising expectations, but satellite launches did not continue steadily, resulting in no revenue while expenses continued.

According to the U.S. economic media CNBC, Virgin Orbit's deficit had already reached $821 million (approximately 1.075 trillion KRW) by the end of 2021. Consequently, the launch target, which was seven at the beginning of last year, kept decreasing, and ultimately only two launches were conducted throughout the year.

Especially, the failed launch attempt in Cornwall, UK, in January this year was a fatal blow. This caused investors to completely turn their backs, and the company failed to secure additional funding. Chairman Branson reportedly invested $60 million (approximately 78.6 billion KRW) in Virgin Orbit over the past four months but decided not to provide further support.

Virgin Orbit's stock price began to plunge after announcing a company-wide suspension of operations and notifying employees of unpaid leave on the 16th. The stock price, which had risen to $7.59 per share on April 4 last year, fell to $0.20 (20 cents) on that day.

According to CNBC, Virgin Orbit employees believe the company failed due to mismanagement of finances by the executives. Some employees pointed out that most executives, including CEO Dan Hart, came from Boeing and were inefficient in overall management, including cost control.

Meanwhile, the company reportedly recently discussed business sale issues with some venture capital investors, but the talks ultimately fell through.