Virgin Hyperloop lays off half of its staff and abandons public transport
Virgin Hyperloop has laid off almost half of its staff and abandoned plans to develop a passenger transport system, the company confirmed this week.
The company – which envisions a high-speed “vacuum tube” transport system with pods traveling up to 670 miles per hour – will instead focus on cargo shipments.
Virgin Hyperloop confirmed that the company was “changing direction”, adding that the change in focus was largely related to the need for a more robust transportation system when it comes to moving goods. It is a weakness in the global supply chain that has been particularly exposed during the COVID-19 pandemic.
It is thought that Virgin’s super-fast pods could be a solution for moving a lot of goods quickly.
“It allows the business to respond in a more nimble and nimble way and in a more cost effective way,” Virgin Hyperloop told the Financial Times of its abandonment of public transport in favor of a laser focus on freight “These types of decisions are never taken lightly.”
The dismissals were carried out by videoconference, two people concerned told the newspaper. The number of job cuts was “definitely not expected”, according to one of the sources. The company said 111 people had been made redundant.
The shift to freight shipping marked a significant shift for Virgin Hyperloop, which is reportedly considering going public through a merger with a special purpose acquisition company, or SPAC.
Virgin Hyperloop did not comment on those plans, but told FT it “continues to invite long-term investors who share our vision for the future of transportation.” The company has raised over $400 million from investors to date.
DP World, the majority owner of Dubai-based Virgin Hyperloop, told the newspaper that the company may review passenger travel once freight services are operational.
“It’s quite clear that potential customers are interested in freight, while passengers are a bit further afield,” DP World said in a statement. “Focusing on pallets is easier to do – there’s less risk to passengers and less regulatory process.”
Formerly known as Hyperloop One, the company was created to continue the vacuum tube technology first described by billionaire Elon Musk. Hyperloop One changed its name to Virgin Hyperloop in 2017 after billionaire Richard Branson joined its board.
Late 2020, Virgin Hyperloop became the first company to carry out a test of the technology with passengers.