Richard Branson’s Rocket Company Virgin Orbit Cuts 85% of Workforce

Virgin Orbit, a subsidiary of Virgin Group has announced that they will seize all operations and lay off 85 percent of its workforce. Virgin Orbit’s aim was to provide a cheaper alternative for launching small satellites into space.

On January 17, 2021 Virgin Orbit made waves in the private Space travel segment when LauncherOne reached the Low Earth Orbit. The launch was performed from a retrofitted Boeing 747, that was flying at the altitude of 10 kilometers over the Pacific Ocean.

Virgin Orbit’s idea to save costs by bypassing liftoff stage is quite brilliant. For the cost of $10 million Virgin Orbit promises to launch payloads that weigh up to half a ton into Low Earth orbit. The only comparable service is offered by Orbital ATK’s Pegasus XL rocket that also launches mid-air, but the cost of $40-55 million far exceeds that of Virgin Orbit’s.

So why did Richard Branson’s brilliant idea ultimately fail? Well, as with many startups the main reason could be attributed to insufficient funding and lack of outside investments.

The announcement of seizing all operations and laying off 675 employees came two months after a failed launch mission in Cornwall, UK, where a dislodged rocket fuel filter prevented LauncherOne from reaching Low Earth orbit. Both the LauncherOne rocket and a payload of nine satellites were lost.

Only 100 employees will remain on Virgin Orbit’s payroll after April 3^rd. Virgin Orbit will pay around $15 million in severance payments and related costs to the mass layoffs. The cash injection needed to go through with the layoffs comes from Virgin Investments.

According to 2022 Q3 earnings report the company disclosed an operating loss of over $50 million. The company was kept afloat by cash injections from Virgin Group.

With SpaceX and Blue Origin seemingly pulling away only time will tell the fate Richard Branson’s other space travel company – Virgin Galactic.