Virgin Hyperloop has laid off nearly half of its workforce as the company shifts its focus from carrying passengers to shifting freight. Cuts totaling 111 jobs were confirmed by Virgin Hyperloop to The Financial Times, who spoke to former employees of the company. They described the scale of the layoffs as “absolutely not expected.”
US-based Virgin Hyperloop is one of the leading companies developing the technology of the same name – an updated version of an age-old idea to reduce the energy demand of trains by placing them in vacuum-sealed tubes where air resistance is minimal. The concept was revived in 2013 when Elon Musk published a white paper on the subject, which uses magnetic levitation used by bullet trains and imparts the current branding.
Virgin Hyperloop, formerly known as Hyperloop One, has reached major milestones, including the first-ever test run with human passengers. But like many companies trying to bring experimental technology to fruition, it also struggles with attracting funding and talent and meeting deadlines. In 2017, business leaders said: The edge they expect to see “working hyperloops around the world…” by 2020. That date was later moved to 2021. There are currently no working hyperloops in action.
A spokesperson for Virgin Hyperloop told the FT that the recent budget cuts would allow the company to “respond in a more agile and agile way and in a more cost-effective manner” and that the decision to lose so many staff at once was not “taken lightly”. The spokesperson said the change in focus on cargo over passengers “really has more to do with global supply chain issues and all the changes brought about by Covid.”
According to DP World, an Emirati state logistics company with a 76 percent stake in Virgin Hyperloop, moving freight instead of people will simplify safety and regulation. “It is obvious that potential customers are interested in freight, while the passenger is a little further away,” DP World told the FT† “Focusing on pallets is easier to do – there is less risk to passengers and less regulatory process.”
As reported by FTDP World said Virgin Hyperloop was already in talks with 15 potential customers to provide a freight version of the hyperloop, and the Saudi Arabian government is considering a route connecting the port city of Jeddah to the capital Riyadh.