Sir Richard Branson’s rocket business Virgin Orbit has announced that it will lay off 85 percent of its staff due to a lack of new investment.

According to media reports, the company will also cease activities for the foreseeable future.

It comes after the business paused operations for several weeks in an apparent attempt to shore up its finances.

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In after-hours dealing in New York on Thursday, the company’s shares fell by more than 44 percent.

Virgin Orbit stated in a US regulatory filing that the choice was taken “in order to reduce expenses in light of the company’s inability to secure meaningful funding.”

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The layoffs will affect roughly 675 employees “from all areas of the company.”

According to the statement, Sir Richard’s investment company Virgin Investments has invested $10.9 million (£8.8 million) in Virgin Orbit “to fund severance and other costs associated with the workforce reduction.”

Virgin Orbit anticipates layoff payments and other costs to total around $15 million.

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It comes amid media reports that the business’s CEO has informed employees that the company will suspend operations until further notice.

Chief executive Dan Hart said at a meeting with employees “We have no choice but to implement immediate, dramatic and extremely painful changes,” according to CNBC, which first reported the news

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As a public company, the firm, which was established in 2017, has not made a profit.

It is part of Sir Richard Branson’s business empire, which also encompasses the airline Virgin Atlantic and the space tourism firm Virgin Galactic.

In January, Virgin Orbit tried the first satellite mission launched from British soil, which failed.

The company’s Launcher One rocket, which took off from the Boeing 747 aircraft Cosmic Girl, made it to space but fell short of its goal orbit.

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The mission was owed as a milestone for UK space exploration.

It was expected it would mark a major step forward in fulfilling a drive to turn the country into an international player – from manufacturing satellites to building rockets and creating new spaceports.

Earlier this month, Virgin Orbit said it was “initiating a company-wide operational pause” and “anticipates providing an update on go-forward operations in the coming weeks.”

Virgin Orbit did not quickly respond to a request for comment from the BBC.

Source:  BBC News

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