Virgin Orbit will stop operating from Thursday to shore up its finances.
It is reported that almost all employees at the satellite launch company will also be laid off.
Bosses announced the move to the staff at a meeting on Wednesday and said another update would be provided next week.
It comes after the company failed to launch its first satellite mission from British soil in January.
Chief Executive Dan Hart told staff the furlough would buy Virgin Orbit time to finalize a new investment plan, a source who attended the event told Reuters.
It was unclear how long the leave would last, but Mr. Hart said staff would receive more information mid-next week.
Reuters said Virgin Orbit shares fell 18.8% to 82 cents (72 pence) in extended trading.
A company statement said, “Virgin Orbit has commenced a company-wide hiatus beginning March 16, 2023, and looks forward to providing updates on continued operations in the coming weeks.”
When launched in January, the jumbo jet operated by Virgin Orbit took the rocket high over the Atlantic from Newquay, Cornwall.
The rocket fired and appeared to take off fine but then suffered an “anomaly.”
The satellite that was carried could not be released and was lost. Cosmic Girl, transport aircraft 747, returned safely to base.
Virgin Orbit later said the mission failed because the rocket’s fuel filter came off, causing one of the engines to overheat.
