Richard Branson’s small satellites company Virgin Orbit saw its stock plunge to an all-time low on Friday. The crash happened after the company announced massive layoffs in a filing with the U.S. Securities and Exchange Commission (SEC).
According to the SEC filing, Virgin Orbit intends to slash its workforce by 85 percent. A total of 675 employees will leave the company as part of efforts “to reduce expenses in light of the Company’s inability to secure meaningful funding.”
“Unfortunately, we’ve not been able to secure the funding to provide a clear path for this company. We have no choice but to implement immediate, dramatic, and extremely painful changes,” Virgin Orbit’s CEO Dan Hart told employees at a meeting announcing the job cuts.
The layoffs will affect all Virgin Orbit departments with the major part of them expected to be finalized next week. The move will cost the company $15.5 million, including $8.8 million in severance payments and benefit payments and $6.5 million in other costs.
Job cuts at Virgin Orbit were widely expected after the company previously decided to “pause” its operations due to a rocket launch failure in January. The decision will remain in place “for the foreseeable future.”
Virgin Orbit shares dropped more than 40 percent on Friday to close at $0.20 per share. The stock lost 88.83 percent of its value year to date and is 97.93 percent down since it was listed on NASDAQ in May 2021.