Yesterday, Zwift announced a sweeping workforce reduction and key leadership changes. They issued the following statement:
We shared with our team this morning that we are making a reduction in force. This was difficult news to deliver and we regret having to part ways with some incredibly talented and passionate people. Their contributions to our mission were substantial and we’re grateful for their work.
Eric Min will continue as sole CEO and Kurt Biedler has chosen to resign. Zwift remains a healthy, global business with a passionate community. We have seen accelerated growth over the last year but in the current environment, we must focus on sustainable and efficient growth. Zwift will be more agile and focused on delivering great things for our community.
They also posted a forum topic on the workforce reduction with a few additional details.
This is the fourth substantial workforce reduction we’ve seen at Zwift.
- March 2020: long-time Zwift executives including Mike McCarthy and co-founder Scott Barger leave the company, along with several key high-level employees including the Director of Global Business Development and VP of Digital Commerce.
- May 2022: 150-worker, 20% reduction with a “pause” on hardware projects and a refocus on core software, including co-founder Jon Mayfield returning to leadership.
- March 2023: 80-worker, 15% reduction with heavy cuts in Marketing, Creative, and People Teams. Heading into this reduction we saw the hire of Co-CEO Kurt Beidler (ex-Amazon), Mike Lusthaus (also ex-Amazon) as Chief Technology Officer, and former Director of Product at Meta, Manlio Lo Conte, as Chief Product Officer. Not long after the reduction we saw the exit of some long-time Zwift executives.
Zwift isn’t offering much detail beyond their press statement, but the statement itself tells us this latest reorg is about two things: co-founder Eric Min returning to the helm, and rightsizing the business for sustainability.
Kurt Beidler coming on as Co-CEO in December 2022 was big news, and strong platform usage for 2023 was supported by a respectable number of game updates released at a steady cadence. But his choice to resign clearly shows that the board’s unconventional decision to go the co-CEO route hasn’t worked out as planned. The good news is that Zwift co-founder and avid Zwifter Eric Min seems very well-positioned to strongly guide the company’s vision and culture.
Zwift says they “remain a healthy, global business” but also, “in the current environment, we must focus on sustainable and efficient growth.” Their forum post expands on this by saying:
The business is healthy and our community is growing. At the same time, growth has not rebounded at a fast enough pace to justify all of the investments that we have been making. As a result, we are taking action to become leaner with a continued focus on delivering great experiences for our community.
It’s no secret that the indoor cycling space has struggled since Covid highs (Saris being sold in bankruptcy and Peloton’s stock dropping 97% from Covid peaks are two examples). In an environment where investor capital is drying up, Zwift must forecast cash flow years into the future and rightsize their staff now in order to reach profitability.
Can a “more agile and focused” Zwift deliver more for the average Zwifter? Time will tell. Zwift can say anything they’d like, but in the end they must deliver innovative features, much-needed game improvements, and compelling content on a stable platform to remain viable long-term. Here’s hoping that’s exactly what happens.