Virgin Orbit, the rocket company founded by billionaire Richard Branson, has recently undergone a significant reduction in its workforce. The company has let go of approximately 85% of its employees, or around 675 people. This decision came after Virgin Orbit failed to secure the necessary financing to continue its operations, which prompted the company to make drastic adjustments immediately.

ccording to the company’s CEO, Dan Hart, Virgin Orbit has stopped operating “for the foreseeable future.” The decision to lay off employees was a difficult one, but it was necessary to minimize expenses given the company’s inability to acquire sufficient funding. The layoffs will have a significant financial impact, with the company expecting to incur overall costs of around $15 million.

The costs associated with the reduction in force are expected to be mainly comprised of severance payments and employee benefits expenses, amounting to $8.8 million. An additional $6.5 million will be spent on outplacement services and WARN Act exposure. The company expects to recognize most of these costs in the first quarter of 2023, with the reduction in force essentially finished by April 3, 2023.

Virgin Orbit had been working on the Launcher One air-launched rocket, which aimed to carry small satellites into orbit. However, the company’s first attempt to launch satellites from UK soil failed in January, which had a significant impact on its finances. Despite this setback, the company is still moving forward with its plans. A Virgin Orbit spokesperson stated on March 15 that an inquiry into the unsuccessful mission “is almost complete, and our next production rocket with the appropriate change incorporated is in final stages of integration and test.”

Virgin Orbit was established in 2017 after splitting off from its sister firm, Virgin Galactic. Richard Branson founded both companies with the goal of advancing commercial space travel. While Virgin Galactic focuses on space tourism, Virgin Orbit’s primary focus is on launching satellites. Despite the recent challenges faced by the company, Branson remains committed to its success and continues to support its operations.