Nearly all of Virgin Orbit’s roughly 750 employees are on administrative leave after the company paused operations yesterday amid financial struggles.
CEO Dan Hart told employees they would be on unpaid leave during an all-hands meeting at the company’s Long Beach headquarters Wednesday afternoon, spokesperson Alison Patch confirmed to the Business Journal. Despite claims in other media reports, however, Patch noted that staff has not been furloughed.
“All employees remain active,” Patch said.
Company benefits remain in place for all employees, and those on leave can use sick leave and/or paid time off, Patch said. Only essential support staff will continue working, Patch said.
Hart told staff the pause is intended to give the company time to finalize a new investment plan, an employee familiar with the meeting told the Business Journal. An update is expected to be given to employees sometime next week, Hart said.
In November, the company disclosed $71.2 million cash in hand at the end of the third quarter. While the company saw $30.9 million in revenue, it reported an adjusted earnings before interest, taxes, depreciation and amortization (commonly referred to as EBITDA) loss of $42.9 million.
Over the last four months, the company has raised $55 million in unsecured convertible and senior secured convertible notes from an investment arm of Virgin Group.
The company has not announced when it would report its fourth-quarter results.
Virgin Orbit went public on the Nasdaq at the beginning of last year with a share price over $8. Since opening, however, the share price has steadily declined until reaching $1.04 Wednesday.
Share prices tumbled another 37.5% by Thursday morning, reaching a new low of 65 cents.
In 2015, Virgin Galactic moved into a newly built facility in Long Beach’s Douglas Park industrial complex. Two years later, the operation transitioned to Virgin Orbit, a new branch dedicated to small satellite launch, while Virgin Galactic continues to operate outside of Long Beach.
The company’s decision to make Long Beach its home marked the beginning of the city’s resurgence as a hub for aerospace innovation. The city’s space economy has grown quickly in the years since and now includes Rocket Lab, SpinLaunch, Relativity Space and Vast Space.
Virgin Orbit developed a new launch system that sees its LauncherOne rocket deployed from under the wing of its modified Boeing 747 aircraft, Cosmic Girl. Following four successful missions that delivered 33 satellites to orbit, the company experienced its first mission failure in January.
Dubbed “Start Me Up,” the mission was the first orbital launch from the United Kingdom and the company’s first international effort. The rocket reached space, but a fuel filter became dislodged, causing the second stage to shut down.
“Like many businesses today, Virgin Orbit has faced a lot of headwinds,” Patch said, noting that the mission failure only compounded the firm’s financial woes.
In a statement, the company said its investigation into the malfunction is nearly complete. Changes have been integrated into the rocket, Patch said, and the company is awaiting Federal Aviation Administration clearance to fly.