Specialized Culls 8% of its Workforce

Specialized announced Wednesday it was laying off 8 percent of its workforce in what the company called a “transformation.” The layoffs affect the entire company globally, including company-owned retail stores in the United States and abroad.

Here is the press release straight from the source:

Morgan Hill, CA, January 11th, 2023 – Over the last three years, the industry has changed at an incredible pace and shown that cycling is more powerful than ever. It’s clear the time has come for transformation and shifts for the future. This past week, Specialized made the incredibly difficult decision to say goodbye to 8% of teammates around the world. With the global economy changing faster than anticipated and rapid changes within cycling, the organization adjustment will allow the brand to be adaptive, whilst still investing in innovation.

“We are transforming the company around our purpose to Pedal the Planet Forward. Our priority is to better serve riders, retailers, and communities and to be the best place for our teammates to innovate and grow. The time is now to adapt to the current environment and ultimately led us to make some extremely tough decisions today. I want to recognize those teammates who departed and thank them for all their contributions, hard work, and dedication to Specialized. We are focused on ensuring that they are fully supported during this difficult time. It may be tough to see in the moment, but the future of cycling and the future of our brand is bright.” – Scott Maguire, Specialized CEO

In March, company founder Mike Sinyard stepped down as CEO and appointed Maguire, coming from Dyson. In May, Armin Landgraf (former CEO of Pon Bike and Canyon Bicycles) was appointed head of world markets.

The company filed a Worker Adjustment and Retraining Notification (WARN) notice with the state of Oregon on Wednesday, indicating it would lay off seven Oregon employees as part of a nationwide cut of about 120 workers. The notice said the workers would be laid off on Friday and that the company would pay them 60 days of salary and benefits instead of the 60 days notice required by law.

Specialized’s layoffs follow a series of cuts across the industry, as has already occurred at companies like Zwift, Wahoo, Strava, Pearl Izumi and publisher Outside (CyclingTips).

All brands experienced booming sales and inventory shortages starting in 2020, only to begin struggling with overstocking in some categories in mid-2022.

In 2021 Specialized began to react to Trek’s acquisition of many retail stores in the US (and recently Europe) including some of Specialized’s largest dealers in some territories. First, it offered an alternative, saying it would help fund retailers who were looking to retire or leave their shops. Then Pon.Bike (Cervelo, Focus, Santa Cruz, etc.) also bought the Mike’s Bikes chain in California and Specialized withdrew its bikes from Mike’s stores and began opening company-owned distribution centers. Specialized has since begun acquiring stores more aggressively. 

This led to many hirings in a short time. Then with the market changes reversing course they changed directions, which began publicly last month, when Specialized ended contracts with several ambassador athletes, ending its program, even though the company had specified that: “Our ambassador program is continuing to change based on the needs of cyclists, but it’s definitely not going away .”