Virgin Hyperloop switches focus from passengers to cargo as it lays off half its staff

Photo by Matt McClain/The Washington Post via Getty Images

Virgin Hyperloop has laid off almost half of its staff as it focuses on shifting freight. The Financial Times spoke to former employees of Virgin Hyperloop who said that the company had cut over 100 jobs. The scale of the redundancies was definitely not expected.

The US-based Virgin Hyperloop is one of the leading firms developing the eponymous technology, which is an updated version of a centuries-old idea to reduce the energy demands of trains by placing them in vacuum-sealed tubes where air resistance is minimal. The concept was brought back to life in 2013 when Musk published a paper on magnetic levitation used by bullet trains and bestowing the current branding.

The first ever test-run with human passengers has been achieved by Virgin Hyperloop. It is one of the many companies trying to bring the experimental technology to fruition that is struggling with attracting funding and talent. The company executives told The Verge they expected to be working hyperloops around the world by 2020. There are no working hyperloops.

The decision to lose so many staff at once had not been made lightly, and the recent cuts would allow the company to respond in a more flexible and cost-effective manner.

It is clear that potential customers are interested in the idea of moving cargo instead of people.

According to the report, Virgin Hyperloop was in talks with 15 potential customers to deliver a cargo version of the hyperloop, and that the Saudi Arabian government was considering a route linking its port city of Jeddah with the capital Riyadh.