When you're up, you're up, and KTM and its parent company, Pierer Mobility Group, appeared to be riding high just a couple of years ago. But that was two years ago. And it's now the back half of this year, which is decidedly a down time for Pierer.
At the end of last year, we reported that it was about to cut around 300 jobs and shift more production to India and China through its partnerships with Bajaj Auto and CFMoto.
And now, after all the sturm und drang surrounding its acquisition of a controlling stake in storied Italian marque MV Agusta, KTM parent company Pierer Mobility Group has now announced plans to lay off even more employees before 2024 is out.
To paint a clear picture of where we're at right now, Pierer noted that it had 6,314 employees as of June 30, 2023. But as of June 1, 2024, it now counts just 6,024 employees among its ranks. That's a difference of 290 employees, but the numbers are a little more complicated than just layoffs.
See, another thing that happened during that time was the addition of MV Agusta's 213 employees into the Group. Pierer notes that it actually laid off a total of 373 employees already in the first half of 2024, so the combination of addition and subtraction of employees accounts for the headcount shift from year to year.
But 2024 continues to be a down year for Pierer, mainly due to downturns in its Bicycles segment. Things aren't rosy in motorcycle-land, either, but they're particularly bad in bicycles, where revenues were down by 36 percent year-on-year in the first half of 2024, as compared to the same period in 2023.
Pierer's half-yearly report refers to the current environment as "persistently challenging," and is forecasting a revenue decline of between 10 and 15 percent for the entirety of 2024.
To help offset this decline, the Group says it will initiate "a further significant cost reduction" during Q3 2024, namely laying off an additional 200 employees "in the overhead area." And I couldn't help but notice that that's almost exactly as many employees as it added with its acquisition of MV Agusta; the exact number there was 213.
So, the new secret sauce is to add a legacy luxury brand (as well as the factory facilities in Varese), but stretch a reduced number of employees to do the same amount of work across your multiple brand families?
That seems to be how it's shaking out, anyway. And if you're on the bicycle side, rather more ominously, the report says that it will be "systematically restructured." Language that is constructed to be seemingly anodyne, but is never actually that bloodless when it's about people's livelihoods rather than just numbers in a spreadsheet.
