The Sir Richard Branson-backed futuristic transport start-up Virgin Hyperloop has announced that it has laid off 111 people, almost half of its staff, as the company pivots from its original plan to carry passengers to freight. The company, which is developing hyperloop technology that involves pods through low pressure tubes at speeds of up to 670mph, said the change of direction was “to do with global supply chain issues and all the changes due to Covid.”
Hyperloop technology has been championed by a number of high profile entrepreneurs with Elon Musk conceptualising the concept in a 2013 white paper entitled Hyperloop Alpha. His company The Boring Company has built a hyperloop test track in Hawthorne, California.
Hyperloop infrastructure is seen by many as a potentially relatively cheap way to augment transport systems with ultra-fast intercity or commuter lines. The Boring Company estimates a Hyperloop journey between New York and Washington DC would take less than 30 mins. The tracks are relatively simple, the system builds on existing technologies around vacuum tubes and magnetic railways, and far quicker and less expensive to build than, for example, a metro line.
Virgin Hyperloop, a Los Angeles-based start-up that Sir Richard Branson licensed the Virgin brand to after leading an $85 million investment round in 2017, was originally developing its technology with a view to carrying human passengers. However, for the foreseeable future it will shift its focus to cargo.
In 2018, the port of Hamburg commissioned a €7 million pilot project from European hyperloop technology company Hyperloop Transportation Technologies (HTT) to build a 100m-long testing terminal and a loading station. They hope one day to build a distribution network across Germany and beyond at a cost of roughly €20 million per kilometre.
Virgin Hyperloop is now moving in the same direction and told the Financial Times the decision to pivot and slash staff number is “allowing the company to respond in a more agile and nimble way and in a more cost-efficient manner. These types of decision are never taken lightly.”
As well as Branson’s Virgin Group, the company counts the Dubai-government owned DP World, which holds a 76% stake in the company. In total, the start-up has raised over $400 million. The company is now working on a hyperloop cargo system that can deliver freight at “the speed of flight and closer to the cost of trucking” and will connect with existing road and rail transport links.