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Specialized laying off 8% of its employees

Published January 11, 2023

MORGAN HILL, Calif. (BRAIN) — Specialized announced Wednesday that it is laying off 8% of its workforce in what the company called a “transformation.” The layoffs are across the company globally, including at company-owned retail stores in the U.S. and overseas. Public filings show that the company planned to let go about 120 workers in the U.S.

“We are transforming the company around our purpose to Pedal the Planet Forward,” Specialized CEO Scott Maguire, said in a press release Wednesday. “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.”

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

WARN notices in other states show Specialized let go 80 workers in California, 15 in Colorado, nine in Washington, one in Nevada and one in Arizona.

The Specialized layoffs come following rounds of cutbacks across at the industry at firms including Zwift, Wahoo, Strava, Pearl Izumi, The Pro’s Closet and Outside. 

They come in the midst of several years of disruptions at the company, which like most brands had booming sales and inventory shortages starting in 2020 and then began struggling with over-inventory in some categories in mid-2022.

In 2021 the company began to respond to Trek’s acquisition of many retail stores in the U.S., including some of Specialized biggest dealers in some territories. It first offered an alternative to Trek's acquisition spree, saying it would help finance retailers who were looking to retire or move on from their stores. When Pon.Bike bought the Mike’s Bikes chain in California, Specialized pulled its bikes from the Mike’s stores and began opening company-owned fulfillment centers in that market and others.

Around that time, Specialized began acquiring stores more aggressively. Last January the company announced it would begin consumer-direct sales of complete bikes.

In March, company founder Mike Sinyard stepped out of his CEO role and appointed Maguire, who came Dyson, to that role. In May, Armin Landgraf (former CEO of Pon.Bike and Canyon Bicycles) was named chief of worldwide markets.

On October 1, David Schriber, formerly with Nike, Burton, and Masterclass, joined Specialized as chief marketing officer.

Early last fall, Specialized enacted cost-cutting at many of its U.S. retail stores, reducing hours and laying off managers and others, several sources have told BRAIN. With the acquisition of many stores in the U.S. and elsewhere, Specialized’s workforce has grown significantly in the last two years, from a few hundred office workers at facilities around the world to well over 1,000 employees total, according to one manager that BRAIN spoke with. 

Last month, Specialized ended contracts with several ambassador athletes in an apparent cost-cutting move. A Specialized representative told VeloNews that the company was not ending its ambassador program, however. “Our social ambassador program is continuing to change with the needs of the rider, but it definitely isn’t going away,” the representative said. 

Specialized told Oregon that layoffs in that state involve two graphic designers, one digital designer, two web developers, a marketing manager and a product manager.  

“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,” the company said in the press release on Wednesday.

“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,” the press release said.

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