Harley-Davidson, the storied and struggling Milwaukee-based company that last year launched its first production electrical bike in an effort to reboot gross sales and enchantment to a youthful buyer base, is reducing 700 jobs from its world operations. About 500 employees will likely be laid off earlier than the top of the yr, the corporate mentioned Thursday.
The company’s CFO John Olin is also out, efficient immediately. Harley-Davidson’s current VP Treasurer Darrell Thomas has taken over as interim CFO till a successor is appointed. “Significant changes are needed, and we should transfer in new instructions,” Harley-Davidson chairman, president, and CEO Jochen Zeitz mentioned in a statement.
Harley-Davidson has branded its job cuts and restructuring plan “The Rewire,” which Zeitz spoke about within the firm’s first-quarter earnings name again in April. On the time, Zeitz mentioned the corporate was nonetheless dedicated to its different strategic plan generally known as “More Roads” that aimed to make the producer an accessible, world model by way of advertising and dealership initiatives and a series of recent merchandise that included small-displacement motorcycles for Asia markets and EVs, beginning with the LiveWire.
Still, Zeitz declared back in April it was time for a change.
“On account of my observations and evaluation, I’ve concluded that we have to take vital actions and rewire the corporate now by way of priorities, execution, working mannequin, and technique to drive sustained revenue and long-term development,” he mentioned in April. “We are calling it The Rewire. And it’s our playbook for the subsequent few months, resulting in a brand new five-year strategic plan, which we are going to share when visibility to the long-run returns.”
Visibility into the long-run has apparently returned, and in Harley-Davidson’s view, it’s time to chop prices and probably get again to its core merchandise. Preliminary Rewire actions are anticipated to lead to restructuring prices of about $42 million within the second quarter of 2020, Harley-Davidson mentioned in its announcement Thursday. The corporate plans to share an abstract of The Rewire, together with extra prices and anticipated financial savings, when it releases its Q2 outcomes. The Rewire will set the muse for a brand new 2021-2025 strategic plan, which is anticipated to be shared within the fourth quarter.
Harley-Davidson has seen its gross sales drop in recent years within the U.S., its largest market, as its core Baby Boomer prospects have gotten older. The COVID-19 pandemic dampened sales additional and the company has already in the reduction of manufacturing, which resulted in dozens of job cuts final month at its factories in Wisconsin and Pennsylvania. The push into EVs and products for Asian nations aimed to expand into new markets and breathe new life into Harley-Davidson.
It’s unclear how “The Rewire” would possibly have an effect on the corporate’s push into EVs. The LiveWire, which launched last fall, was alleged to lead a future line-up of EVs deliberate by Harley-Davidson — spanning bikes, bicycles, and scooters. Harley-Davidson has not responded to a request for remark; TechCrunch will replace the article if the corporate responds. The assertion from Harley-Davidson makes no particular point out of EVs. It solely mentioned the important thing components of its restructuring plan had been to reinforce core strengths and higher steadiness growth into new areas, prioritize the markets that matter, reset product launches, and construct up its equipment and merchandising businesses.