Adidas subsidiary Runtastic will cut about 70 out of 250 jobs and discontinue its existing “adidas Training” app in the coming months. Thursday’s broadcast reported that the leading Austrian startup in Paching (Upper Austria) will be “aligned more efficiently,” and projects and teams will be downsized.
“We’ll focus on our core product, the hit adidas running app. Unfortunately, that means we have to reduce the number of projects and teams involved,” says Scott Dunlap, President of Runtastic. The employees were briefed by management about the future strategy and job cuts at a staff meeting Thursday morning. “Today’s step is a great challenge for all of us,” said the company’s president. Management will hold one-on-one meetings with all affected employees to discuss “individual solutions.”
Sold for 220 million euros
Founded in 2009 by four college friends, the startup was sold to German sporting goods manufacturer Adidas in mid-2015. At that time, Adidas not only acquired 50.1 percent of the shares from Axel Springer, but also acquired the shares of the founders of The Upper Austrian Four and Venture Capitalists. The group authorized the takeover at a cost of €220m at the time. Runtastic co-founder and company director Florian Gschwandtner retired from the company at the end of 2018.
In 2021, Runtastic had sales of €33.7m and annual profit of €1.4m, according to company register (Wirtschaft-Compass). “The company has been able to continue to develop successfully and economic development largely met expectations,” said the management report for 2021. There are no annual financial statements for 2022 yet.
Parent company Adidas no longer wanted to rely on the Runtastic brand. Runtastic Pro was no longer developed last year and then removed from the app stores. “In fiscal year 2022, there was a decrease in trademark rights of €16 million. This decrease was due to the merger of the Runtastic brand name into adidas and accordingly the net worth of the Runtastic brand right was fully amortized as of December 31, 2022,” adidas – Annual Report 2022. (APA)
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