• Virgin Orbit furloughed most of its employees earlier this month
  • Talks to secure a $200 million funding from Matthew Brown reportedly fell through
  • The company was reportedly working with restructuring firms after the operational pause

Virgin Orbit will cease operations "for the foreseeable future" after failing to secure funding. The rocket company has decided to lay off all but 100 employees in a bid to reduce expenses.

"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," CEO Dan Hart told employees at a meeting Thursday afternoon, according to an audio recording of the meeting obtained by CNBC.

Hart said about 90% of the workforce will be affected across all teams and departments. A securities filing Thursday stated that Virgin Orbit will reduce its workforce by approximately 85% or about 675 employees "in order to reduce expenses in light of the Company's inability to secure meaningful funding."

Hart went on to say that a severance package will be provided for departing employees, which includes extension of benefits, a cash payment and career services. The career support will reportedly have a "direct pipeline" set up with Virgin Orbit's sister company, Virgin Galactic.

A Virgin Orbit spokesperson earlier this month said the company was implementing an operational pause, which included unpaid furlough for most of its employees. Only a small team will continue working, CNBC reported.

The furlough was supposed to last for only about a week, but Hart informed employees earlier this week that it was extended as talks to secure funding continued.

Billionaire Richard Branson, the founder and largest stakeholder of Virgin Orbit, has reportedly come to the rescue of the burned-up company as his investment arm, Virgin Investments, injected $10.9 million toward severance pay of about 675 affected staff, a person close to the deal told Financial Times on Thursday.

Virgin Orbit had been burning about $50 million each quarter, insiders told FT, even with Branson investing more than $1 billion into the rocket company since its founding in 2017.

Days after news of the worker furlough broke, Reuters reported that Virgin Orbit was nearing a deal to receive funding from venture capital investor Matthew Brown. According to the term sheet seen by the outlet, the company could have secured $200 million in funding.

People familiar with the investment talks told CNBC that discussions to secure a lifeline fell through over the weekend even after Brown previously told the outlet that he was already in the final stages of talks to invest.

Another unnamed potential buyer also reportedly had discussions with Virgin Orbit but talks collapsed Sunday night, a person with knowledge of the matter told CNBC.

Amid its financial struggles, the space satellite venture had sought an insolvency backup plan should it continue to fail in securing new investments, Sky News previously reported. It said Virgin Orbit was working with restructuring firms Ducera and Alvarez & Marsal (A&M) and that the insolvency planning was being conducted outside of the U.S.

A Virgin Orbit spokesperson said the company's "next production rocket with the needed modification incorporated is in the final stages of integration and test." However, the company still has to secure new capital for launching the rocket.

Earlier this year, its LauncherOne rocket, which was mounted on a modified Boeing 747 jet called "Cosmic Girl," failed to reach orbit after the plane took off from the United Kingdom. Virgin Orbit confirmed the launch was a failure about two hours after the plane took off, CNN reported.

"It appears that LauncherOne has suffered an anomaly which will prevent us from making orbit for this mission," the company's director of systems engineering and verification, Christopher Relf, said at the time.

Cosmic Girl and its crew returned safely to earth.

About a month after the failed launch of LauncherOne, Hart explained that investigations pointed to a dislodged filter that "caused mischief downstream." "This is like a $100 part that took us out," Hart said in a conference in California, reported.

Before the U.K. fiasco, Virgin Orbit had four successful launches, including one that sent seven satellites to low Earth orbit for the U.S. Space Force.

UK's First launch of Virgin Orbit's LauncherOne rocket in Newquay
Virgin Orbit's LauncherOne had an "anomaly" during its launch earlier this year. Reuters