Virgin Hyperloop Lays Off Half Its Staff As It Pivots From Passenger to Cargo Trains

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Virgin Hyperloop has laid off roughly half of its staff as it pivots its high-speed vacuum train technology away from passenger transportation and toward shipping freight due to regulatory and supply chain issues.

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The Los Angeles-based company confirmed to the Financial Times this week that it had laid off 111 people, with the job cuts meant to allow it “to respond in a more agile and nimble way and in a more cost-efficient manner” as it shifts its focus from passengers to cargo, according to a company spokesperson. The spokesperson added that “global supply chain issues” and “changes due to COVID” had driven that shift.

“Virgin Hyperloop as a company is responding to strong customer demand for a cargo-based hyperloop system and is focusing its resources on delivering this product,” the company said in a subsequent statement to the BBC—though adding that its long-term vision still involved “address[ing] passenger mobility.”

DP World, the Dubai-based logistics company that holds a majority stake in Virgin Hyperloop, told the FT that prioritizing cargo over passengers reduces the company’s operating risks and regulatory burdens. “It’s abundantly clear that potential customers are interested in cargo, while passenger is somewhat farther away,” DP World said. “Focusing on pallets is easier to do—there is less risk for passengers and less of a regulatory process.”

DP World added that Virgin is in talks with at least 15 potential customers interested in a cargo-only hyperloop transportation system—including a project spearheaded by the Saudi Arabian government that would link the port city of Jeddah with the capital city of Riyadh.

Virgin Hyperloop did not immediately respond to dot.LA’s requests for comment.

The news appears to quash, for the time being, Virgin Hyperloop’s futuristic designs on transporting people from Los Angeles to San Francisco in only 45 minutes, and is also a blow to federal efforts exploring hyperloop technology. The concept of super-fast vacuum trains dates back hundreds of years, and was revived and popularized by Tesla CEO Elon Musk in a 2013 white paper.