Virgin Orbit extends employee furloughs

Virgin Orbit extends unpaid furloughs as company seeks funding to address financial difficulties following failed rocket launch


Virgin Orbit, an aerospace company based in California, has announced that it will be extending unpaid furloughs for most of its employees due to a need to raise capital. CEO Dan Hart stated in an email to employees that discussions about the company’s investment have been active, but no detailed update could be provided at that time. The CEO also postponed a planned all-hands meeting until a later date when more meaningful details could be provided.

Virgin Orbit has been facing financial difficulties since a failed rocket launch a few weeks ago. The company, which is backed by billionaire Richard Branson, furloughed almost all of its 750 employees in mid-March while seeking financial assistance to improve their launch business. Reports had previously indicated that Virgin Orbit was in advanced discussions with Texas-based investor Matthew Brown to secure funding of USD 200 million (INR ~1600 crore), but it looks like those talks fell through, according to recent reports.

The employee furlough means that only a small group of employees will be actively working while the company explores options to address its financial situation. During the release of their third quarter financial statement in November 2022, Virgin Orbit disclosed a cash balance of USD 71.2 million (INR 585 crore) at the end of the quarter, while reporting a revenue of USD 30.9 million (INR 254 crore). However, the company also reported an adjusted EBITDA loss of USD 42.9 million (INR 353 crore) for the same period.

The failed rocket launch has led to financial struggles for Virgin Orbit, making it difficult for them to operate effectively. The company has not provided any specific details about their financial situation or the options they are exploring to address it. The CEO has only stated that a new company-wide meeting will occur no later than Thursday when more meaningful details can be provided.

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