Virgin Hyperloop: The reason behind its cut in workers

Virgin Hyperloop is a developer of a transportation technology used to deliver fast, direct, and sustainable transportation at scale.

Virgin Hyperloop, which has raised more than $400million in funding, is the only company to have completed a successful test run with passengers using technology around vacuum tubes and magnetic railways with a view to cutting land-based travel times drastically and boosting the efficiency of freight transportation.

However recently, Virgin Hyperloop has laid off almost half its staff as the company switches its focus from transporting passengers to shifting freight.

The US company said that 111 people were laid off on Friday, as the group focuses on delivering a cargo version of the experimental transport, which propels pods through low-pressure tubes at speeds of up to 670mph.

A spokesperson for Virgin Hyperloop told the FT that the recent cuts would allow the company “to respond in a more agile and nimble way and in a more cost-efficient manner”

As we know there has been a huge global supply chain issue because of Covid. The recent shift to freight transportation is linked to helping the economy recover as more freight transportation will encourage more productivity from firms and also a greater output as firms would be able to maximise their economies of scale. This is due to the fact that once these tubes have been developed it is less likely that they will face problems such as weather issues that would potentially disrupt the supply of goods.

Transporting goods is one of the main causes of high CO2 emissions, with Virgin Hyperloop it would bring a more sustainable future with the high speeds of planes and the lower costs of trucking. However, the initial high costs of this project has been criticised which would potentially have to be paid back with increased prices.

People who were laid off said that it was done through a video call, with one ex-worker stating that the scale of the cuts was ‘definitely not expected’. This cut in staff has led to low worker morale within the company as it has brought around insecurity around their jobs which could however lead to lower productivity levels.

Virgin hyperloop is said to be the future of sustainable transportation of freight, but how costly will this cut in workers really be?


Written by Rohan Dhir


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