Harley-Davidson cutting 700 jobs globally

In addition, CFO has left the company

Harley-Davidson headquarters
Harley-Davidson Inc.'s headquarters in Milwaukee.

Last updated on July 13th, 2020 at 11:40 am

Milwaukee-based Harley-Davidson Inc. plans to cut 700 jobs globally as it moves toward a new strategic plan developed by chairman and chief executive officer Jochen Zeitz.

Called “The Rewire,” the plan will eliminate the positions of around 500 current employees, according to a Harley-Davidson securities filing. Information about the elimination of the other 200 jobs was not provided, but they could be currently unfilled positions.

The company also plans to overhaul its operating model to become “a learner, more nimble organization.”

At the end of 2019, Harley had around 5,000 employees in its motorcycle segment and another 600 in financial services.

Harley has its corporate offices in Milwaukee, a product development center in Wauwatosa and manufacturing in Menomonee Falls; Tomahawk, Wisconsin; Pennsylvania; Thailand; Brazil and India. The financial services business has offices in Chicago, Texas and Nevada.

A Harley spokesperson declined to say which facilities the eliminated positions would come from.

Harley expects to incur $50 million in restructuring costs from the actions, including $30 million in one-time termination benefits and another $15 million in contract termination and other costs.

“The Rewire is progressing very well and substantial work is being done to eliminate complexity and get Harley-Davidson on a path to winning. Our new operating model is simpler, more focused and enables faster decisions across the entire company,” Zeitz said. “We’ve taken a hard look at our entire set up, our spending, and how work is getting done, to align our operating model, structure and processes.”

John Olin - Harley-Davidson photo
John Olin – Harley-Davidson photo

Chief financial officer John Olin has also left Harley after 17 years with the company.

“Significant changes are necessary, and we must move in new directions. I thank John for his commitment during his 17 years with the company and for his leadership during this critical phase of The Rewire,” Zeitz said.

Zeitz and his team are expected to detail a more formal strategic plan for 2021 through 2025 in the fourth quarter this year.

In June, the company also said it would eliminate around 90 positions in Pennsylvania and another 50 in Tomahawk as it adjusts production to meet lower demand caused by the coronavirus.

Zeitz, who took over as CEO in March, said on his first earnings call he would be developing the Rewire plan to address challenges facing Harley-Davidson. The company has seen declining sales for several years amidst increased competition, growth in other motorcycle segments, the aging of core riders and increased costs from trade tensions and tariffs.

Zeitz also said the company had become too complex with somewhat isolated and overly centralized leadership. He also noted that morale within the company had suffered from several rounds of cost cutting and employees had become accustomed to the company not meeting high expectations.

The new strategic plan would set achievable and realistic goals and “reignite our Harley-Davidson soul and culture,” Zeitz said.

Jochen Zeitz
Jochen Zeitz

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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