Support road.cc

Like this site? Help us to make it better.

news

Zwift lays off over 150 staff after “pausing” smart bike hardware plans

The news comes just two weeks after Wahoo confirmed around 50 redundancies as part of the company’s “strategic” shift towards software

Just over two weeks after Wahoo confirmed that it had laid off around 50 people as the brand refocuses on indoor training software, Zwift has announced its own round of redundancies, which sources claim will affect over 150 staff. 

The lay-offs largely centre on but are not limited to the company’s hardware division and come as Zwift says it is cancelling – or “pausing” – its plans to produce a new smart bike and trainer. 

In January, the virtual cycling platform released details of its then in-progress smart bike and direct-drive turbo trainer designs in an online survey that was sent out to a small number of subscribers, leading to speculation that the arrival of Zwift’s indoor training hardware was imminent. 

> Is Zwift's Tron bike coming to life? Affordable new Zwift smart bike and Zwift Wheel direct driver trainer revealed in research survey 

However, a Zwift spokesperson has told road.cc that the recent lay-offs form part of a scaling back of that project, owing to the recent fall in indoor cycling hardware sales since the end of the lockdown-induced boom of 2020 and 2021, as well as supply issues caused by the war in Ukraine.

“Given the current macroeconomic environment, we have decided to scale back our hardware offering, pausing plans to launch a smart bike,” a statement from the company reads.

“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.”

> Wahoo buys RGT Cycling virtual training platform... and lays off 50 staff 

While Zwift refuses to confirm the exact number of employees impacted by the lay-offs (though road.cc has been told that the rumoured number of 150 isn't far off the mark), the company says that the redundancies were not purely focused on its hardware division and that all staff affected were given severance packages.

A Zwift spokesperson also claimed that, despite the redundancies and the suspension of the smart bike project, the business - and in particular its core virtual cycling platform - is “in a solid financial position at the moment” and that the company expects to see further growth in that area for the foreseeable future.

“We started to scale the business with anticipation of launching hardware, spinning those products up,” says Zwift PR director Chris Snook.

“But also, we planned for the additional revenue that would have been driven by sale of that hardware, and that revenue isn’t going to be coming in now.

“So the decision has been made to right-size the business as the result of the loss of that projected revenue stream.”

Snook continued: “We didn’t think it was a wise move to launch a high-end trainer or a high-end smart bike at this time.

“There are products existing on the market that are readily available, and there are going to be fewer people looking to spend big money on high-end trainers. We don’t want to be fighting for that space.

“The intent [of launching Zwift’s own hardware products] was always to grow the market, not to go into hand-to-hand combat with those guys, and that’s not great for the industry.”

> Zwift changes its layout – and people are very angry 

Zwift says that the shift in the company’s focus will allow it to reprioritise its virtual software platform, which – as we reported last week – faced a backlash from users after its latest range of updates, including a controversial new user interface, were rolled out. 

“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,” Zwift said.

“We firmly believe these changes will allow us to achieve these goals and better support the continued growth of our subscription business. Further, these changes will preserve Zwift’s strong financial position as the world navigates these turbulent times.”

> End of lockdown wipes billions off Peloton’s market value 

Zwift, of course, isn’t the only indoor cycling business which has struggled in the current economic climate after an unprecedented surge in demand during the early stages of the coronavirus pandemic.

Two weeks ago, Wahoo announced the acquisition of virtual platform RGT Cycling, at the same time as news circulated of around 50 redundancies at the company, which the brand told road.cc were part of “strategic changes… made to support the growth and development of Wahoo”. 

In November, shares at in-home fitness brand Peloton fell by a third, wiping $9 billion off the company’s market value, and resulting in the redundancies of over 2,800 employees (or one-in-five of its corporate staff) as part of severe cost-cutting measures.

The company also slashed the price of its entry-level Peloton bike by 20 per cent in 2021, squeezing margins and cannibalising potential sales of its premium Peloton+ model.

Ryan joined road.cc in December 2021 and since then has kept the site’s readers and listeners informed and enthralled (well at least occasionally) on news, the live blog, and the road.cc Podcast. After boarding a wrong bus at the world championships and ruining a good pair of jeans at the cyclocross, he now serves as road.cc’s senior news writer. Before his foray into cycling journalism, he wallowed in the equally pitiless world of academia, where he wrote a book about Victorian politics and droned on about cycling and bikes to classes of bored students (while taking every chance he could get to talk about cycling in print or on the radio). He can be found riding his bike very slowly around the narrow, scenic country lanes of Co. Down.

Add new comment

17 comments

Avatar
squired | 1 year ago
0 likes

Although Zwift is still installed downstairs in my home gym, I've not used it this year. My brother is still using it, but probably once a week at the moment and soon I'll be pulling the plug on the subscription.  Too few new routes and climbs.  If I want to do the same climb I can go outside for that.  Indoors should offer the variation I can't get outside.

These days the only indoor platform I use is Virtuopro and that is limited due to the realities of returning to work (commute by bike) and desire to get outside on weekends.  Although it is still in beta I find it much better than Zwift in many ways, especially the route variation.  The market badly needs people like them to challenge Zwift.  Was it not a couple of years ago that they got something stupid like $400m of funding?  What has actually changed since then?

Avatar
Awavey replied to squired | 1 year ago
1 like

I suspect a good chunk of the money went on server farms to support the platform during unprecedented demand and ensuring lag is minimal, it's quite a complex setup I imagine to deliver what they do.

For me indoor riding is all about keeping the legs moving when I cant go outside due to weather or time issues. The routes dont really fuss me and it's still more interesting to look at than riding a static bike in a gym.

Whether that's really worth £13 a month, is debateable of course.

Avatar
pablo | 1 year ago
0 likes

I tried several times getting into zwift because all my riding buds are into it but I just don't get it. It's a boring pile of poo. Trainer road etc are not graphically driven but I find those far more engaging. People say 'try the racing' but again pointless when people you ride with on the road of a similar level smash you into the ground everytime and insist their setup is correct. It's not really racing it's who's got the worst setup

Avatar
Freddy56 | 1 year ago
1 like

Zwift is Zhit.

Get out on your bikes in the real world

Avatar
Rendel Harris replied to Freddy56 | 1 year ago
4 likes

Freddy56 wrote:

Zwift is Zhit.

Get out on your bikes in the real world

Well aren't you superior, thank you for that constructive and useful comment. There are dozens of reasons people use indoor training, childcare (grabbing a quick half an hour while the baby's asleep), weather (not everyone wants to go out in -10 in the snow), lack of good roads (if you live in the middle of a big city you may have to go a long way before you get to roads where you can properly open up), following training programmes, recovering from injury etc, etc. Many people use Zwift or its equivalents precisely so they can get more out of their "real world" riding by being better prepared, and when they get out there some of them will doubtless do longer, harder rides than you. Don't be so supercilious.

Avatar
Brauchsel replied to Rendel Harris | 1 year ago
2 likes

Exactly. I get out on my bike in the real world when I can, but during the week I'm expected to work during the day and apparently you're not supposed to leave a 5-year-old alone for the two hours it would take me to get anything like out of the south London sprawl. 
 

An hour or so on Zwift of an evening isn't perfect, but it beats sitting on my arse in front of the TV all night. 

Avatar
mark1a | 1 year ago
0 likes

I'd be surprised if there was going to be huge capital investment going into the hardware, when the prototypes were shown, the visuals and specs suggested that they were based on Tacx Neo 2T hardware. However I wonder if it was Tacx/Garmin that pulled the plug, I'm sure I read somewhere that Zwift will only allow access to the steering functions to hardware companies that enable steering exclusively in Zwift. Short-sighted if the latter is true in my opinion. The hardware & software of indoor training has benefited greatly from open standards such as ANT+ FE-C, previously the software was specific to the hardware. 

Avatar
Secret_squirrel replied to mark1a | 1 year ago
0 likes

I'm pretty sure it was just for a limited period. 
So instead Garmin decide to do SFA with the buttons for nigh on 2 years now. Not that I'm a bitter NeoBike owner or anything .....

Avatar
espressodan | 1 year ago
0 likes

Zwift has stagnated. It's clear to many users that the underlying engine is a technological dead-end. Woeful performance compared to mature engines, silly bugs and no real worthwhile user engagement other than constant ads and sponsorship shoved down our throats. The Zwift 'community forum' is a desert of enthusiastic customers appealing to thin air. Makuri Island was a dud, despite their hype. If a mature games developed decided to enter the market with an environment based on a decent games engine and quickly added worlds or real-life environments from DTED (getting easier and easier with AI based material and object population) they could eat Zwifts lunch very quickly.

If I had a decent synthetic alternative (trying to blend video is the wrong approach) I'd leave in an instant. There was a short lived attempt called 'The Rivet' that was absolutely on the right track.

Avatar
Secret_squirrel replied to espressodan | 1 year ago
1 like

I think an assessment that the engine is an underperforming dead end is correct.

Assuming most users actually care is debateable.

I agree Makuri was a damp squid and continues to be so.  Odd focus on scenery density rather than rideable distances.

Avatar
mdavidford replied to Secret_squirrel | 1 year ago
2 likes

Secret_squirrel wrote:

Makuri was a damp squid

 

Avatar
RoubaixCube replied to mdavidford | 1 year ago
1 like

mdavidford wrote:

Secret_squirrel wrote:

Makuri was a damp squid

 

 

 

Avatar
philhubbard replied to Secret_squirrel | 1 year ago
0 likes

Agreed, any gaming system where the results are based on what the game server interprets and not every other users server is inherently flawed. 

We saw this at the virtual TdF and their marquee event, the WTRL Premier League races, riders were winning on their screen only to find out they were not first on Zwift's own servers

Avatar
Jem PT replied to espressodan | 1 year ago
1 like

I'm not on Zwift, but some of my pals are. I could never understand why rides on Makuri Island were partly in the sea? Was that on a Zwift pedalo?? 

Avatar
Awavey replied to Jem PT | 1 year ago
0 likes

Is that the one with the underwater tunnels ?

Avatar
Secret_squirrel | 1 year ago
1 like

Implying Wahoo is struggling because of a trivial 50 redundancies against the background of a fairly hefty aquisition is an "interesting" view.

Whereas Zwifts bike always had the whiff of a vanity project.  Lets make a smart trainer - ok.  Lets make it look the our Tron bike - always had the whiff of a good idea gone bad and a company lost in their own bullshit.

Avatar
mdavidford replied to Secret_squirrel | 1 year ago
1 like

'Refocus[ing] on indoor training software' is a rather dubious characterisation as well - they may have made an investment in that side of the business, but there doesn't appear to be any indication that they're moving away from the hardware side. Looks to be more about an 'ecosystem' approach.

Latest Comments