Specialized lets go 8% of global workforce, UK profits underwhelm

The news that’s greeted many Specialized employees in the past 24 hours has been extremely tough. Some 120 US based employees, plus an unconfirmed number globally, have been informed they are surplus to requirement, as the business moves to meet new needs in changing market conditions.

Scott Maguire, Specialized CEO – “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 that has led us to make some extremely tough decisions today. I want to recognize those teammates who departed and thank them for all of 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.”

The announcement further reads: “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 organisation adjustment will allow the brand to be adaptive whilst still investing in innovation.”

In the UK, the brand reported in Companies House records a 2021 turnover of £94 million, with a profit of £3.7 million in what was widely recorded as a fairly good year for sales and just prior to the overstock headaches now broadly witnessed industry wide.

As a percentage, the profit registered against revenue raises some questions about industry profitability, and gives a wider industry window into the news that Giant – the biggest manufacturer in the industry – asked to delay payment to suppliers.

BR&IN have explored the US implications in detail, where State based employment law requires filling to precede making employees redundant. “The company filed a Worker Adjustment and Retraining Notification (WARN) notice with the state of Oregon …. and Washington”

Separately Stateside the brand has invested $14.9 million in acquiring the former Pearl Izumi offices, a 55,000 square foot plot that has been gonged for its sustainable features by the Colorado and Denver chapters of The American Institute of Architects. Now owned by United Sports Brands, Pearl Izumi left the space recently, citing that many employees were now remote workers.

Industry speculators looking at recent appointments, including Specialized CEO (ex-Dyson COO) and CMO (ex-Nike VP Global Marketing), may wonder if the recruits have been brought on board with a mission to prepare the brand for sale. Whilst Merida owns a 49% stake, from a 2001 deal, the wider industry is currently primed for a round of consolidation based moves, as typically happens in challenging market conditions.