Comments in brackets.
Virgin Hyperloop axes half its staff in focus on freight
by Simeon Kerr and Andrew Edgecliffe-Johnson
Virgin Hyperloop has made almost half of its staff redundant as the company developing the high-speed transport system pivots from passenger travel to freight.
[In the overwhelming majority of cases, speed is worth far more money for people than for freight. When time is that valuable, you can always go by air, which also offers flexibility of destination.]
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.
[Because completely changing your business model and infrastructure requirements requires way fewer staff.]
The company is “changing direction”, it added. “It really has more to do with global supply chain issues and all the changes due to Covid.”
[Just so we're clear. This is a land-based system that is, under the most wildly optimistic assumptions, years away from having a single operational line, let alone the extensive network needed to make this model viable. And they're making these changes in response to current "global supply chain issues."]
Backers of the company, which is developing technology first proposed by Elon Musk, include Dubai government logistics provider and ports operator DP World and Sir Richard Branson’s Virgin Group.
[Neither Virgin nor any other "hyperloop" company has spent a single dollar developing Elon Musk's completely unworkable air-caster based proposal. They are working on maglev vactrains. All they kept was the name.]
And internal turmoil has followed the departure of Virgin Hyperloop co-founder Josh Giegel last year, triggering a “massive talent flight” as other executives also quit the company, according to one former senior employee. “Morale is low and there is no confidence in the new direction.”
Shunning passenger transport was triggering a “complete unravelling” at the group and would put its sole contract with the Saudi government in jeopardy, the person said.
“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.”
[Though no apparent reduction in the infrastructure component, which means no significant cost reduction period.]
The company is also considering a merger with a special purpose acquisition company, or Spac, two people briefed on its strategy said. Virgin Hyperloop, Virgin Group and DP World declined to comment on any plans.
[There had to be a Spac.]
This is all, to use the technical term, polishing the turd. The company, which has raised more than $400mn in funding, is very probably running on fumes at this point. They can't come out and say this because they need more money and there's nothing that spooks the greater fool herd like the whiff of desperation. I suspect even Dubai is looking for an exit and it's remarkably difficult for a big, flashy business idea to be so stupid that it scares Dubai.
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