WASHINGTON – Orbital Sciences has ceased operations at its OrbComm unit which let go about 100 employees at the satellite-based wireless data communications service company earlier this week, SPACE.com has learned.

"Orbital and its space-systems group have suspended all work on OrbComm’s satellites," Orbital spokesman Barry Beneski said. The Dulles, Virginia company will begin operations when they receive additional cash, he said.

The OrbComm website states the unit employs 520 people. The layoffs include engineers, managers and administrative workers.

Beneski pointed out that OrbComm is still operating its network of 35 satellites. OrbComm’s cutbacks affect only satellites in production.

OrbComm recently sent out a press release announcing that it has hired Bear Stearns "to assist in the search for strategic partners and investors in OrbComm."

"As we previously have disclosed, OrbComm has substantial funding requirements before it is expected to be cash-flow positive. In light of this continuing funding need, we have decided to search aggressively for additional investors," OrbComm Chief Executive Scott Webster stated in the June 16 press release.

The source of OrbComm’s problem involves its majority shareholder Teleglobe, an international voice and data carrier based in Canada.

Teleglobe missed an $8 million payment to OrbComm last month, according to sources close to the both companies. Orbital on Thursday denied that Teleglobe missed a payment last month and that Teleglobe is current on its investment funding to OrbComm.

The sources said that Canadian telecommunications giant Bell Canada Enterprises (BCE) feels it might have paid too much for its acquisition of Teleglobe, which has been bleeding red ink.

In addition, BCE officials are questioning whether they want to hold onto Teleglobe’s 66-percent stake in OrbComm sources say. Teleglobe’s missed payment last month was a move by BCE to begin disassociating itself from OrbComm.

Officials at BCE and Teleglobe were not immediately available for comment.

Orbital Chief David Thompson's made it his number-one goal this year to restore the faith of its investors shaken by a year of accounting missteps, unmet financial expectations and disappointing management strategies.

"One of the bigger sins that you can commit as a company is changing top management and restating your financials," said satellite-analyst George Reed-Dellinger at Washington Analysts in the nation’s capital.

Thompson created a new president's position last October and hired J.R. Thompson (no relation) to pick up the slack so he could focus on Orbital’s corporate strategy.

Accounting problems began to surface in February 1999, when Orbital reported losses of $19.6 million for the fourth quarter of 1998 and total losses of $6.4 million for the year on revenue of $734 million. It attributed the losses to corrections to its books for having recognized revenue too quickly from two of its subsidiaries, including OrbComm.

The company’s 1998 financial statement apparently didn’t follow generally accepted accounting procedures by recognizing revenue from contracts that had not been completed and counting internal sales -- sales to businesses in which it owned a majority stake -- in its earnings.

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Orbital later fired its accounting firm KPMG and restated its financials.

In April, the satellite maker said it lost $121.9 million in 1999, compared with a 1998 loss of $56.6 million. The loss for the fourth quarter of 1998 was $25.6 million.

Revenue for 1999 totaled $874.9 million, up 20 percent from $730.7 million the year before.

Orbital’s Beneski would not say how the latest developments at OrbComm would affect Orbital’s bottom line.

"OrbComm is likely to overcome problems with additional capital coming in," he said. "And we are still committed to OrbComm."

OrbComm has a "legitimate" low-Earth-orbit operation up and running, Reed-Dellinger said. "I am sure they will be able to find a partner," he said.