Virgin Galactic announces 18% layoffs and will suspend commercial space flights in the middle of next year

According to news on November 9, on Wednesday local time in the United States, the space tourism company Virgin Galactic announced when it released its third quarter financial report that it planned to suspend its space flight business next year and focus its resources on developing the next generation of Delta. Delta suborbital spacecraft.

Virgin Galactic said in its third-quarter earnings report that although it has been executing commercial operations at a rate of one per month since June launch mission, but it will reduce the flight frequency of the VSS Unity space plane to a quarter, then suspend flights in "mid-2024" to focus resources on the final assembly of the new Delta-class suborbital spacecraft.

On Tuesday, Virgin Galactic laid off 185 employees, or about 18% of its workforce, in an effort to "reduce costs and strategically realign resources." The layoffs, which bring Virgin Galactic's headcount down to 840 people, are expected to result in annual cost savings of about $25 million.

Virgin Galactic reported a third-quarter net loss of $104.6 million, or $0.28 per share, compared with previous expectations of a loss of $0.43 per share, according to analysts surveyed by LSEG.

Virgin Galactic’s third-quarter revenue was $1.7 million, up from $767,000 in the same period last year. Earlier this month, Virgin Galactic completed its fifth commercial space flight.

Virgin Galactic shares rose 8% in after-hours trading. The stock is down 55% year to date. Virgin Galactic had cash and securities totaling $1.1 billion at the end of the third quarter.

Virgin Galactic has been spending heavily to expand its fleet of spacecraft, and currently the company only operates one spacecraft, the VSS Unity. Virgin Galactic is developing its Delta-class spacecraft to increase the frequency of weekly flights. The company plans to open a new facility in Phoenix by mid-2024 for the production of Delta-class spacecraft.

Virgin Galactic CEO Michael Colglazier said in a statement: "We expect to have sufficient funding to put our first two Delta-class spacecraft into service. And achieve positive cash flow in 2026."

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