Virgin Orbit is furloughing nearly all its employees and pausing operations for a week as it looks for a funding lifeline, people familiar with the matter told CNBC.
Company executives briefed staff on the situation in an all-hands meeting at 5 p.m. ET on Wednesday, according to people who were in the meeting. The furlough is unpaid, though employees can cash in PTO, with only a small team continuing to work. Virgin Orbit is also moving up payroll by a week to Friday.
In the all-hands, company leaders told employees that they aimed to provide an update on the furlough and funding situation by next Wednesday or Thursday, according to the people, who asked to remain anonymous to discuss internal matters.
Virgin Orbit did not immediately respond to CNBC’s requests for comment.
Shares of Virgin Orbit fell roughly 10% in after-hours trading from its Wednesday close of $1.01 a share. The stock has slid steadily from its debut of near $10 a share in December 2021.
The rocket-building company developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight. But the company’s last mission suffered a mid-flight failure, with an issue during the launch causing the rocket to not reach orbit and crash into the ocean.
When Virgin Orbit reported third-quarter results in early November, it disclosed cash on hand of $71.2 million as of the end of the quarter. In the face of $30.9 million in revenue, Virgin Orbit reported an adjusted EBITDA loss of $42.9 million for the period as it continued to burn cash.
Since the fourth quarter, the company has steadily brought in funds in the form of debt via an investment arm of Richard Branson’s Virgin Group. The company raised $25 million in an unsecured convertible note in November, before raising $20 million and $10 million in senior secured convertible notes in December and February, respectively. The notes give Branson’s parent company “first-priority” to Virgin Orbit’s assets.
As of Wednesday, the company had yet to announce when it would report fourth-quarter 2022 results.