January's launch failure of Virgin Orbit's LauncherOne rocket, like one shown here mounted beneath a Boeing 747 for a 2019 test over the Pacific Ocean, may factor in to the company's current difficulties. File Photo courtesy of Greg Robinson/Virgin Orbit
March 16 (UPI) -- Satellite launch provider Virgin Orbit said Thursday it was suspending operations with immediate effect.
The company confirmed the "company-wide operational pause" to CNBC and the BBC while saying it would provide "an update on go-forward operations in the coming weeks."
Virgin Orbit also reportedly told staff that 600 employees, nearly all of the company's workforce, would be furloughed at a meeting on Wednesday, with the company saying it would update them on the situation next week.
CNBC reported that the furlough is unpaid but employees will be able to cash in paid time off and the company is moving up payroll to Friday.
The pause is reportedly to give the company, which was founded by Sir Richard Branson, time to seek fresh funds that would allow it to resume operations.
The Long Beach, Calif., company has yet to report its fourth-quarter results but posted a $43.6 million loss in the quarter ended Sept. 30, up from $38.6 million in the same period in 2021.
Branson has injected $55 million in cash and secured debt into Virgin Orbit over the past four months, most recently via a $10 million note Jan. 30, with an option to convert the debt into Virgin Orbit shares.
The announcement comes two months after the company's failure to deliver into orbit the first-ever satellite launched from British soil on Jan. 9.
The failed launch from Spaceport Cornwall based at Newquay Airport sent ripples through the fledgling sector in Britain, which has ambitions to become a global competitor in the lucrative satellite launch industry.
Virgin's LauncherOne, which uses a Boeing 747 to deliver it to its launch altitude of 35,000 ft, reached an altitude of 112 miles before its upper stage failed resulting in the rocket and payload of nine satellites falling back to Earth.
"Our investigation is nearly complete and our next production rocket with the needed modification incorporated is in final stages of integration and test," Virgin Orbit's spokesperson said.
Virgin Orbit stock, which has been in slow decline since its NASDAQ debut at just under $10 a share in December 2021, ended trade Wednesday down 4.72% at $1.01.