Virgin Orbit to cease operations, lay off nearly 700 workers

Satellite launch firm Virgin Orbit Holdings is calling it quits, and will lay off most of its workforce and wind down plants and testing facilities in Long Beach and the Mojave desert.

The Long Beach-based firm tied to British billionaire Richard Branson said it will wind down operations at its headquarters, manufacturing plant and its desert testing grounds, Bloomberg reported in the Long Beach Press-Telegram.

A growing cash crunch compelled the public company to cut 675 jobs, or 85 percent of its workforce, “in order to reduce expenses in light of the company’s inability to secure meaningful funding,” the company said in a regulatory filing this week.

The remaining 15 percent of employees will wind down the failed firm.

Virgin Orbit will leave its real estate holdings, whether owned or leased, including properties in Long Beach and the town of Mojave, 100 miles north of Los Angeles, according to its website.

The Virgin Orbit headquarters is housed in a 144,200-square-foot, two-story building on 7.9 acres at 4022 East Conant Street at Pacific Pointe South at Douglas Park, on the northside of Long Beach Airport, according to PropertyShark. Its assessed market value is $23 million.

The Virgin Orbit Payload Processing Facility includes a 40,400-square-foot, one-story  manufacturing plant on 2.3 acres at 3880 McGowen Street, just north of the headquarters. Its tax assessor’s market value is $8 million, according to PropertyShark.

The company’s Testing Facility is located at 1223-A Sabovich Street, Building 79, at the Mojave Air & Space Port in Mojave, according to its website. The building is occupied by The Spaceship Company, Virgin Galactic’s space-system manufacturing unit.

In September, Virgin Galactic leased an extra 104,400 square feet at the Mojave airport facility, which combined its various buildings under one consolidated lease. 

The shut-down announcement from Virgin Orbit follows a high-profile launch failure in January and a collapse in its stock price from $7 a year ago to 19 cents. The aerospace firm temporarily suspended operations earlier this month while it sought more capital.

The firm — part of Branson’s empire that includes airline Virgin Atlantic and spaceflight company Virgin Galactic Holdings  — hasn’t turned a profit as a public company.

Charges will come to $8.8 million in severance pay and employee benefits and $ 6.5 million in other costs such as outplacement services, Virgin Orbit said in the filing.

Two weeks ago, the company approved a severance package for top executives, with CEO Daniel Hart standing to collect a cash payout of twice his unspecified base compensation.

Branson injected $10.9 million by buying a note convertible into shares through his Virgin Investments Ltd., allowing the failed business to fund severance pay and other costs, Virgin Orbit said in the filing.

Virgin Orbit is still looking to sell all or part of its business, an unidentified source told Bloomberg. The launch company was founded in 2017 as an offshoot of Virgin Galactic before going public in 2021. 

Unlike some competitors that launch rockets from the ground, Virgin Orbit employs a technique known as air launch, in which its LauncherOne rocket is deployed at a high altitude from underneath the wing of a modified Boeing 747 plane. 

The company began developing the rocket at Virgin Galactic, years before the satellite-launch business was formally created, according to Bloomberg. Virgin Orbit successfully launched its first mission to orbit in January 2021 and completed four successful flights through last year.

The company had planned to increase its launch frequency this year but had to reassess after the failed January mission, which was slated to be the first orbital launch from British soil. Its vehicle never reached orbit after incurring a problem with a fuel filter during the flight, leading to the loss of nine small satellites.

 — Dana Bartholomew