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Shares of Virgin Orbit (NASDAQ:VORB) have cratered more than 40% in post-market trading on Thursday, after the company said it would cut about 85% of its workforce.
VORB in a regulatory filing said it would lay off around 675 employees “in order to reduce expenses in light of the Company’s inability to secure meaningful funding” and added that the affected workers were located in all areas of the company.
Meanwhile, CNBC reported that VORB CEO Dan Hart told employees during an all-hands meeting on Thursday that the company would cease operations “for the foreseeable future,” citing audio of the call that it obtained.
“Unfortunately we’ve not been able to secure the funding to provide a clear path for this company … We have no choice but to implement immediate, dramatic and extremely painful changes,” Hart said on the call, according to CNBC.
Last week, VORB reportedly furloughed almost all its employees and paused work for a week as it sought funding to stay afloat.
The company in the regulatory filing on Thursday said it estimated incurring charges of ~$15M related to the workforce reduction, of which $8.8M would be for severance payments and employee benefit costs.
VORB expects to recognize the majority of the charges in Q1 2023 and anticipates the workforce reduction to be completed by April 3.
