Virgin Orbit has paused its operations and furloughed its workforce as it hunts for a funding lifeline.

The satellite launch company, based in California, will put all work on hold for at least a week with just a skeleton team remaining at work.

Bosses told employees at an all-staff meeting on Wednesday that the remainder of the workforce will be put on unpaid furlough, although employees can cash in annual leave.

The decision comes after Virgin Orbit’s attempt to make the first satellite launch from UK soil in January failed.

The company’s chief executive, Dan Hart, told staff that putting them on furlough would buy time to finalise a new investment plan, Reuters reported. Staff are expected to be updated next week.

The pause spooked investors, and sent shares down 18.8% to 82 cents. The stock, listed on the US Nasdaq exchange, is down 44% this year.

The company said: “Virgin Orbit is initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks.”

Thousands of people gathered near Newquay in Cornwall in January to witness the historic Start Me Up mission, which took off from Spaceport Cornwall, blasting nine satellites into orbit.

A converted Boeing 747 called Cosmic Girl took off but the rocket carrying the first satellites launched from British soil failed to reach orbit and was lost. Cosmic Girl successfully released its rocket, called LauncherOne, carrying a payload of nine satellites off the south coast of Ireland.

But shortly afterwards, Virgin Orbit announced that there had been “an anomaly” and the rocket failed to reach the required altitude. The rocket and satellites were lost.

Virgin Orbit said that its investigation into failure of the mission is “nearly complete” and that “our next production rocket with the needed modification incorporated is in final stages of integration and test”.

Virgin Orbit was founded by the billionaire Richard Branson and is 75% owned by Virgin Investments. Branson this month put a further $5m into the company, bringing his investments in the venture to $60m over the past four months.