Virgin Orbit Holdings Inc. plans to cease operations, according to a CNBC report Thursday afternoon.
Virgin Orbit stock
plunged 45% in after-hours trading after declining 16% in Thursday’s regular session.
The company is making the move after failing to secure necessary funding, Chief Executive Dan Hart told employees at an all-hands meeting, according to the report.
Virgin Orbit disclosed in a Thursday afternoon filing with the Securities and Exchange Commission that it would lay off about 675 employees, representing roughly 85% of the company’s workforce, “in order to reduce expenses in light of the company’s inability to secure meaningful funding.” The layoffs impact “all areas” of the company.
The company expects to incur $15 million in charges related to the layoffs. Virgin Orbit disclosed that it sold and issued a $10.9 million convertible note and would use the net proceeds to help fund severance and other related costs.
Virgin Orbit didn’t immediately respond to MarketWatch’s request for comment and confirmation of the reported plans to cease operations.