Sir Richard Branson has been forced to inject $11 million into the satellite launch company after the company failed to raise funding from other sources.
The cash injection will finance the layoffs of 675 staff and the remaining employees will work on winding down the company.
Sir Richard’s loan gives the billionaire rights to the company’s Boeing 747 aircraft and other assets if it goes bankrupt.
Chief executive Dan Hart told staff the company had “no choice but to make immediate, dramatic and extremely painful changes,” CNBC reported.
Financing negotiations with a potential buyer, Matthew Brown, failed over the weekend.
According to the Financial Times, Mr Hart is doing his utmost to secure a bailout deal.
It marks a rapid unraveling for the company, which completed a high-profile – if ultimately unsuccessful – launch from Cornwall in January. The bankruptcy led to a collapse in the company’s share price.
virgin job temporarily suspended operations earlier this month while looking for additional capital.
Shares in US-listed Virgin Orbit, which was once worth $3 billion, plummeted 44 percent after US stock market trading to value it at less than $100 million.
Virgin Orbit officially started in 2017 as an offshoot of Virgin Galactic before going public in 2021 through a combination with a blank check company.
It was intended to launch small satellites into orbit, separate from Virgin Galactic’s focus on sending humans to the edge of space and back.
But two of Orbit’s six missions, mainly from the Mojave Desert in the US, failed.
The latest attempt from the UK ended in disaster after the missile suffered an anomaly and its satellites crashed into the sea.