Richard Branson’s Virgin Orbit is letting go of almost its entire workforce as the satellite launch company struggles to secure funding following a failed mission three months ago.
The Long Beach, California-based company plans to eliminate 675 positions, which constitutes about 85% of its workforce, as disclosed in a recent filing with the U.S. Securities and Exchange Commission.
Operations Suspended, Job Cuts Loom
In early March, Virgin Orbit announced that it would pause all operations amidst reports of possible job cuts. At the time, the company confirmed the work stoppage but did not provide a timeline for resuming operations.
The setback occurred in January when a mission to launch the first satellites into orbit from Europe failed due to a rocket’s upper stage shutting down prematurely. The United Kingdom had hoped that the launch from Cornwall, in southwest England, would have created more commercial opportunities for its space industry.
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Investigation Uncovers Fuel Filter Issue
In February, Virgin Orbit revealed that a dislodged fuel filter had caused the rocket’s engine to overheat and other components to malfunction over the Atlantic Ocean. Despite this setback, the company has successfully completed four satellite launches from California, catering to both commercial and U.S. government defense clients.
Job Cuts Spanning All Company Areas
The regulatory filing on Friday indicated that the job cuts would affect all areas of the company. Virgin Orbit expects to incur around $15.5 million in charges related to these layoffs, with most of the changes taking place in the first quarter.
The company estimates $8.8 million in severance payments, employee benefits costs, and $6.5 million in other employee-related expenses.
Virgin Orbit anticipates completing the majority of the job cuts by Monday.
Future of Small Satellite Launch Market
The increasing demand for small satellite launches for various applications, including Earth observation, communication, and scientific research, has opened up new opportunities for companies like Virgin Orbit.
As Virgin Orbit looks to secure more funding and resume operations, it remains to be seen how the company will navigate the competitive landscape and regain its footing in the small satellite launch market.
Adapting to a Competitive Small Satellite Launch Market
The small satellite launch market has experienced rapid growth, with several companies competing for a share of this expanding industry. As Virgin Orbit navigates its financial struggles and workforce reduction, it will need to adapt to remain competitive in the face of rivals such as SpaceX and Rocket Lab.
The company’s ability to secure funding and resume operations will be critical in determining its future role within the market.
U.K. Space Industry’s Commercial Opportunities
The United Kingdom had high hopes that the launch from Cornwall would mark the beginning of more commercial opportunities for its space industry.
With Virgin Orbit’s recent struggles, the future of commercial spaceflight in the U.K. is uncertain. However, the country has made strides in developing its space sector, including plans for spaceports and investments in satellite technology.
The U.K. government remains committed to fostering a thriving space industry, and the success of its endeavors will be crucial in attracting further investments and partnerships in the future.