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Virgin Orbit Layoffs. 85 percent of workers will lose their jobs

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British billionaire Richard Branson’s Virgin Orbit company has announced that it has to carry out layoffs due to its failure to secure funding to continue operations. 85 percent of employees will lose their jobs.

The news comes weeks after the company halted operations in an attempt to improve its financial situation, the BBC notes.

Earlier this year, despite such plans, Virgin Orbit failed to launch its first satellite from UK territory. At the time, the company issued a statement saying that “at some point during the firing of the second-stage engine, while the rocket was traveling at over 11,000 miles per hour, an anomaly occurred in the system that prematurely ended the mission.”

In a filing submitted to the U.S. regulator because the company is publicly traded, the company said the decision to make the layoffs was made “to reduce expenses in light of the company’s inability to provide significant financial support.”

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The cuts will affect around 675 of the company’s employees “from all areas”.

Richard BransonJustin Lane/EPA/PAP

The layoffs will cost about $15 million

A note to the regulator said Branson’s investment firm (Virgin Investments) had transferred $10.9 million to Virgin Orbit “to fund severance payments and other costs related to workforce reductions.” Virgin Orbit said the expected costs of severance pay and other redundancies would be around $15 million.

The BBC reports that there are reports in the media that Branson is to tell employees that the company will suspend operations until further notice.

“We have no choice but to make immediate, dramatic and extremely painful changes,” Virgin Orbit CEO Dan Hart told an employee meeting, according to CNBC, which first reported the news.

Main photo source: Justin Lane/EPA/PAP

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