Virgin Orbit will suspend operations for a week. Almost all employees are on unpaid leave. New financing options are being sought.
On Wednesday, Virgin Orbit executives informed staff that the space company was taking a week-long pause from operations and taking almost all employees on unpaid leave. The hiatus is intended to give the rocket builder time to look at ways to further fund the operation. The pause in operations begins today, CNBC reports, citing people familiar with the matter.
Operational break for one week
A Virgin Orbit spokesperson confirmed to CNBC that the company is on pause in operations and will provide an update on Virgin Orbit’s continued operations in the coming week. Earlier, an anonymous source told the news channel that more information about the work stoppage and funding situation would follow next Wednesday or Thursday.
The released employees were therefore offered the opportunity to take a paid vacation (PTO – Paid Time Off) during the week of the company break. The pay slips are also to be postponed by a week.
Financial problems after failed rocket launch
Virgin Orbit shares fell about 33 percent to $1.01 a share after trading on Wednesday. The financial problems are apparently also related to the failed rocket launch in January. The company wanted to deploy nine small satellites in space – in the end, the attempt failed, according to the company, due to an “anomaly”. The LauncherOne rocket equipped with the satellites initially took off from the carrier aircraft “Cosmic Girl”, a modified Boeing 747, without any complications. Later there was a breakdown – the rocket missed the required orbit and crashed into the sea. The satellites were also destroyed.
What exactly caused the anomaly is not yet known. The problem was reportedly caused by a loose fuel filter, which in turn caused one engine to overheat. A spokesman for Virgin Orbit told CNBC that internal investigations are almost complete and the next rocket with the necessary modifications is already in the final stages of testing.
As of Wednesday, the company has not given a date for announcing its fourth-quarter 2022 results, CNBC reports.
Virgin Galactic is also under pressure
Virgin Orbit is part of the Virgin Group – a British conglomerate founded in 1970 by billionaire Richard Branson and active in the fields of aviation, telecommunications, Hyperloop, and music (Virgin Records), among others. Virgin Orbit is led by Dan Hart, former vice president of government satellite systems at Boeing. Virgin Orbit was formed in 2017 to separate the development of the LauncherOne rocket from the space tourism-focused company Virgin Galactic.
Not everything is running smoothly at Virgin Galactic either. Although Richard Branson made it into space ahead of Amazon founder Jeff Bezos in 2021, the company had to postpone its planned commercial suborbital passenger flights until this year for two years in a row.