Virgin Orbit slashes workforce by 85% due to failure in securing new funding.

Sir Richard Branson's satellite launch company, Virgin Orbit, is cutting 85% of its staff as they were unable to obtain new funds. This has caused concern that the company could potentially fail.

As per a submission made by the company located in California in the US, they will have to lay off around 675 employees as a measure to reduce their costs. Only 100 employees will be retained to handle the remaining business. According to the submission, this decision was taken due to the fact that they were unable to obtain substantial funding.

The CEO of the company, Dan Hart, is trying his best to make an agreement with financial investors. However, despite his efforts, he informed the employees on Thursday that the company would stop operating for an unspecified amount of time. This information was reported by the Financial Times.

Virgin Orbit had previously halted its operations and placed its workers on unpaid leave during the current month because it wanted to obtain a financial support method.

According to reports, Branson has promised to provide approximately $11 million to cover severance pay for workers. This amount will cover most of the $15 million that the company will spend as a result of the job cuts. Most of the terminated employees are likely to be released by the beginning of the week. "All parts of the company are affected by this," said Virgin Orbit.

Branson has promised to invest more in the venture, making his total investment over the past four months reach over $70 million. He had previously given another $5 million to support the company just a few weeks ago.

Virgin Orbit's shares, which are listed in the United States, experienced a significant drop of nearly 50% in pre-market trading despite already finishing the previous session with a 16% decline.

The firing of employees happened 60 days after Virgin Orbit, a company created by Branson and mostly owned by Virgin Investments, failed in their attempt to send a satellite into orbit from UK territory last January. The corporation acknowledged that the unsuccessful launch, which was supposed to be a groundbreaking event for the UK, happened because of an "anomaly" that prevented the rocket from reaching the necessary altitude, and ultimately, caused it to disappear.

Earlier this month, Virgin Orbit reported that they were nearing completion of their investigation into their unsuccessful mission. They also shared that they are in the final stages of integrating and testing their next production rocket, which will have modifications included.

Virgin Orbit was reached out to for a statement.