Virgin Hyperloop shifts focus to freight only after COVID impact
Virgin Hyperloop will be focussing on freight as opposed to high-speed passenger transport. This was reported after a company shake-up that left 111 people out of a job.
“This is allowing the company to respond in a more agile and nimble way and in a more cost-efficient manner,” Virgin Hyperloop said in comments to the Financial Times (FT). They layoffs mean the company shed about half of its total staff.
COVID-19 to blame
Virgin Hyperloop cites “global supply chain issues and all the changes due to Covid” as reasons behing its change of direction, and that the move is in response to strong interest from freight operators. Dubai’s trade and logistics firm DP World is among the company’s main backers.
“The global supply chain has experienced dramatic changes in the past year due in part to the worldwide pandemic. As a result, the marketplace for cargo and logistics has evolved dramatically and is adapting to new needs”, Virgin Hyperloop said in comments to RailTech.com.
Staff speak of ‘complete unravelling’
The shakeup at Virgin Hyperloop comes at a time of internal turmoil. The departure last October of co-founder and CEO Josh Giegel is said to have triggered a “massive talent flight”, according to the FT. The remaining staff speak of “low morale”, “no confidence” and a “complete unravelling” of the company following the change in direction.
In comments on the news on LinkedIn, Hardt Hyperloop co-founder Mars Geuze was quick to dispel hot takes that hyperloop passenger transport is a dead-end street. “The hyperloop passenger ambition is still very much alive.”
“Bringing hyperloop to realisation is an incredibly complex task, and some companies within the ecosystem are looking for alternative ways to get to market, such as through cargo transport first as a step up. This move of ONE OF the players in the ecosystem is an example of that, but it does not reflect the overall status of hyperloop developments”, Geuze wrote. RailTech.com has put in a request for additional comments and is awaiting a response.
Virgin Hyperloop itself leaves the door ajar for future opportunities in passenger travel, saying the company “continues to invest in technology to seize near-term opportunities keeping in mind the long-term vision to address passenger mobility.”
Move was on the cards
Virgin Hyperloop shunning passenger transport had been on the cards for several weeks. Last month, when the firm announced the arrival of Pierre Chambion as vice-president of engineering and head of technology, the company said in a press release that it would “ provide hyperloop-enabled systems that facilitate fast, sustainable and efficient delivery of palletised cargo around the world.”
“No one could have predicted the disruption the pandemic would have on the movement of freight and people. Virgin Hyperloop technology is perfectly poised to fast-track cargo and address near term market opportunity that will likely last for years to come”, interim CEO/CFO Raja Narayanan noted at the time.
This article was originally published on RailTech.com.