Virgin Hyperloop fires half its staff, pivots to cargo shipments

DUBAI, UNITED ARAB EMIRATES - APRIL 29:  CNBC's Middle East anchor, Hadley Gamble and Sir Richard Br...


Staff members laid off last week

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Virgin Hyperloop, the futuristic pod capable of traveling at speeds up to 670 mph, has proven itself to be too good to be true, once and for all. Virgin fired 111 of its employees last week, a number the Financial Times says comprised about half the company’s workforce.

Two former employees say the layoff announcement was made via video conference call. The sheer number of employees affected by the cuts took at least one of those employees by surprise.

The large-scale layoff comes as part of Virgin Hyperloop’s new mission — which has nothing at all to do with ferrying passengers from one spot to another at breakneck speeds. The company will instead use its existing technology research to create a cargo-delivery system.

Virgin Hyperloop’s dreams haven’t been crushed by flying too close to the sun, as one might assume. Instead, it’s that pesky global supply chain and general COVID-19 economic changes that have forced the company away from its original mission.

Real results — The concept of a “hyperloop” goes back many centuries, though Tesla CEO Elon Musk is largely credited with bringing it back into the cultural consciousness about a decade ago. Musk and SpaceX essentially open-sourced their original research, pushing for other companies to pick up where they left off.

Virgin Hyperloop has been one of the most successful of these experiments thus far. In late 2020, Virgin completed the first successful hyperloop trip with human passengers. They only traveled about 500 meters — and at just 100 mph — but still, they survived the trip in Virgin’s pod. That’s a landmark no other company, even Musk’s, had been able to achieve. No one has since, either.

Always a pipe dream — Despite its promising progress, Virgin Hyperloop’s goal was always high-flung. That’s because the very project of building a complete, working hyperloop is generally considered impossible. Cost and time are the most significant roadblocks; Virgin estimated it wouldn’t be ready to take passengers for at least 10 years. And that was before we realized just how long the pandemic would last.

DP World, a government-owned company with a 76 percent stake in Virgin Hyperloop, is interested in using Virgin’s impressive research to bring a cargo-carrying product to market. The Hyperloop could, once implemented, be a speedy alternative to air shipping options.

It’s a similar pivot to the one we’ve watched much of the autonomous driving industry take. It’s generally easier to get regulatory approval without human passengers, so that’s at least one roadblock that’ll be easier for Virgin Hyperloop to face down. Convincing investors the hyperloop will be worth the ultra-high costs of building and implementing, though… well, let’s just say Virgin still has a long road ahead of itself. And with much less staff, now.