Virgin Hyperloop has become a leading company in making the futuristic transportation system a reality. Recently, it laid off 111 workers which is nearly half its staff, for those keeping count.
The company is concentrating its resources on sending cargo rather than passengers through vacuum tubes at speeds of up to 670 mph.
This change has jeopardized the dream of the company to massively reduce travel times between cities while speeding inside Hyperloop pods. Virgin Hyperloop is the only company to have actually tested the concept in the real world so far.
Last year, the company revealed what this experience would look like. However, now that seems obsolete.
“It really has more to do with global supply chain issues and all the changes due to COVID,” the company told the FT, adding that “these types of decisions are never taken lightly.”
The company is now hoping to enter the freight market, moving cargo at airspeeds but on the ground.
The news comes after the company saw a “massive talent flight,” triggered by the departure of cofounder Josh Giegel last year. One former employee told the FT that “morale is low and there is no confidence in the new direction.”
Investors believe sending cargo through the vacuum tubes makes more sense, at least in the short term.
“Focusing on pallets is easier to do — there is less risk for passengers and less of a regulatory process,” DP World, an Emirati government-owned cargo logistics company that holds a majority stake in Virgin Hyperloop, told the FT in a statement.
DP World is already working on a “Cargospeed” system, which is aimed at moving cargo via Hyperloop-like tubes.