Specialized lays off 8% of workforce in a 'shift for the future' transformation

Specialized has today announced it has laid off eight per cent of its workforce, approximately 125 people, with immediate effect. 

In a press release, the company cites industry and economic challenges as the reason for the decision, stating "it's clear the time has come for transformation and shifts for the future."

"We are transforming the company around our purpose to Pedal the Planet Forward," states Scott Maguire, the new CEO following last year's stepping-down of founder Mike Sinyard. "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 press release also confirms that the layoffs affect the company globally. Further details uncovered by Bicycle Retailer and Industry News report that this total includes seven employees based in Oregon and nine in Washington. The relevant public notice, known as a Worker Adjustment and Retraining Notification (WARN), is yet to be filed in California where the company's Morgan Hill HQ is situated. 

"Over the last three years, the industry has changed at an incredible pace and shown that cycling is more powerful than ever," read the press release. "It’s clear the time has come for transformation and shifts for the future."

But transformation is undoubtedly an already-ongoing process at the American brand. In February 2022, the brand introduced a new direct-to-consumer model to work alongside its traditional retail approach. In March 2022, the company's founder and CEO, Mike Sinyard, stepped down and was replaced by former Dyson COO Scott Maguire. Soon after, he was joined by former CEO of Canyon, Armin Landgraf, and later David Schriber from Nike. 

In August 2022, the brand announced the acquisition of UK retail chain Rutland Cycling, considering job losses therewith. More recently, it cut ties with a large number of its ambassadors, despite claiming in a statement to Cyclingnews that "our social ambassador program is continuing to change with the needs of the rider, but it definitely isn’t going away." Notably, the brand has continued to sponsor its WorldTour teams and has since taken on new individuals, including former WorldTour pro Mitch Docker. 

The move comes after a turbulent year for the cycling industry as a whole. Following the unprecedented demand experienced during the pandemic, the ensuing downturn has led to numerous high-profile layoffs at otherwise market-leading companies. Zwift was forced to lay off 150 staff in spring of 2022, Wahoo also cut staff in Spring, before cutting more - reportedly 15% of their workforce - later in the year. Strava cut a similar number at the same time, while Pearl Izumi cut staff and closed an office following its acquisition by United Sports Brands. Elsewhere, Rad Power Bikes saw its third round of layoffs, and publishing house Outside Online cut senior staff from cycling news websites CyclingTips and Velonews for the second time in a year.

"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 continues, and it would appear that investing has already begun. Bicycle Retailer and Industry News also reports that Specialized has spent $14.9 million on a 55,000-square-foot office building in Louisville, Colorado, the very same office building closed by Pearl Izumi. 

"I want to recognize those teammates who departed and thank them for all their contributions, hard work, and dedication to Specialized," concluded Maguire in his statement. "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.”