Indoor virtual training platform Zwift has cancelled plans for its much-anticipated own-brand smart bike, as the company announced it would be cutting staff across the company in a wide restructure intended to combat changing economic conditions.
Zwift has previously teased a handful of images of its new smart bike, sporting Zwift’s orange branding and a similar aesthetic to the in-game Tron Bike, and gave away more specific details in a market research survey sent to a small selection of users.
The move was intended to capitalise on the increased demand for indoor training spurred by the COVID-19 pandemic and simplify Zwift’s offering for newcomers to the platform, with branded end-to-end software and hardware products.
Those plans have now changed.
"Given the current macroeconomic environment, we have decided to scale back our hardware offering, pausing plans to launch a smart bike," Zwift explained in a statement. "
As a consequence, Zwift has implemented difficult, yet important changes to the organisation of the business. We are grateful for the contributions of all those impacted and have done our very best to support them."
Cyclingnews spoke to Zwift’s director of PR, Chris Snook, who offered further context around the strategy shift and restructure.
"This has been a difficult decision to make but one the company had to preserve the healthy financial position."
According to a source cited in a report by DC Rainmaker (opens in new tab), the company is said to be laying off up to 150 staff, from an overall staff base somewhere around the 700 mark.
Snook was unable to comment on specific numbers, or from which departments these job losses had come. However, he confirmed that the losses would be from both the UK and USA, and extended beyond just hardware-specific roles. All affected employees will receive severance packages, Snook added.
As things stand, it is not clear whether Zwift intends to develop its own hardware at any point in the future, with the company’s official position being that it is "reassessing" its hardware offering.
Rather than immediate business distress, Snook said the restructure reflects adjustments to projected revenue in light of the loss of any potential future hardware sales.
The fall in demand for indoor cycling has affected several other brands, with the considerable decline in revenue and market cap at Peloton being the subject of much attention across international financial press.
Amongst its business challenges, Peloton had a large supply of unsold stock damaging its financial position, which is a situation that Zwift is likely to be trying to avoid amid these latest changes.
Zwift appears to now be prioritising software developments ahead of its hardware plans.
"We are committed to increasing the development of the core Zwift game experience, increasing the speed of new feature releases, and making the platform more accessible than ever before," the company’s statement read.
However, the future accessibility of Zwift's platform could be called into question, as only days ago Zwift announced it would end support for older operating systems. In an announcement on a Zwift forum (opens in new tab) on 4th May, it was revealed that Zwift would no longer support legacy software systems such as macOS 10.12 and 10.13 after August 1.
"We firmly believe these changes will allow us to achieve these goals and better support the continued growth of our subscription business," Zwift’s statement continued. "Further, these changes will preserve Zwift’s strong financial position as the world navigates these turbulent times."
No further development has surfaced on the rumoured takeover of TrainerRoad, after rumours began to circulate in January when social media activity and a Zwift survey suggested the two companies were about to join forces.
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Peter Stuart has been editor of Cyclingnews since March 2022, overseeing editorial output across all of Cyclingnews' digital touchpoints.
Before joining Cyclingnews, Peter was the digital editor of Rouleur magazine. Starting life as a freelance feature writer, with bylines in The Times and The Telegraph, he first entered cycling journalism in 2012, joining Cyclist magazine as staff writer. Peter has a background as an international rower, representing Great Britain at Under-23 level and at the Junior Rowing World Championships.
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