MORGAN HILL, Calif. (BRAIN) — Specialized has laid off 7% of its workforce as the company reassess its economic position in the wake of COVID-19's impact on the world cycling market.
Mike Sinyard, the company's founder, said Thursday that 46 people were let go with the majority coming from its European operations.
France, Spain and Italy have shut down almost all outdoor activity including cycling, while Germany, just this week, began slowly reopening some businesses, Sinyard said in an interview. Specialized receives a significant amount of its revenue from European sales.
The layoffs were primarily in customer service, purchasing, logistics, marketing and several in product management. All those let go received a "generous" severance and will retain their health benefits, Sinyard said.
As for further layoffs, Sinyard, added, "The future is quite uncertain and we're doing everything we can to retain out top talent. But we are very optimistic about the future of the company and cycling."
Sinyard also said he is forfeiting 100 percent of his base salary and senior management is taking a 30% reduction in their salaries.
In a letter sent to dealers and in an interview with BRAIN, Sinyard was clear that the COVID-19 crisis has forced the company to reexamine its priorities and its goals."Specialized is now 46 years old and we've grown a lot. Regrettably, some of the people we had, who've done a fine job for us, we don't need; we have to make room for new people. I know that sounds harsh, but that's the way it is," he said.
The company needs to refocus its investments to maintain its capabilities, resources, structures and teams necessary in what will be a new future. "At this time, it is critical for us to assess the organization against our vision, align our team with the plan, and invest in people who will take us into the future," he said in the letter.
Sinyard warned dealers that future changes could be disruptive. "We'll have to be more flexible in the work we do and challenge the way we have always done things," he said.
