‘Motivation that moves you’ . . . to unemployment: Peloton announces 800 job cuts
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Peloton announces 784 job cuts, $500 price hikes on equipment and a mandatory return-to-office policy amid massive loss of share prices
- CEO Barry McCarthy told employees the company is cutting 784 jobs, closing a significant number of its stores and hiking equipment prices
- The company didn’t specify how many of its 86 retail locations it plans to shutter
- All employees that are not ‘remote-specific’ will be required to return to the office by Nov. 14
- Peloton will also be exiting last-mile logistics and closing its remaining warehouses and shifting delivery work to third-party providers
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Peloton told employees Friday it’s slashing 784 jobs, increasing equipment prices, closing several retail locations and requiring all non-remote employees to return to the office by Nov. 14.
The decision comes as the pandemic darling tries to claw back profits after a 90% loss of its share price upon gym reopenings early this year.
CEO Barry McCarthy, a tech veteran who took over the company in February, said he hopes today’s decisions will ‘better position the company for long term success.’
CEO Barry McCarthy, a tech veteran who took over the company in February, said he hopes today’s decisions will ‘better position the company for long term success.’
The layoffs will come from the company’s distribution and customer service teams.
McCarthy also announced Peloton will stop using in-house employees and vans to deliver equipment, shuttering 16 North American warehouses.
‘This has been a challenge,’ McCarthy wrote in the memo to the company Friday. ‘We won’t fix it overnight, but we have no choice but to make it work.’
Peloton said last month it would cut about 570 employees in Taiwan and nearly 3,000 employees in February.
Peloton’s layoffs, store closures and price increases comes as the pandemic darling tries to claw back profits after a 90% loss of its share price upon gym reopenings early this year.
Pelton will raise the price of its flagship Bike+ (left) by $500 to $2,495 and its Tread treadmill (right) by $800 to $3,495.
In regard to equipment, the company will raise the price of its flagship Bike+ by $500 to $2,495 and its Tread treadmill by $800 to $3,495.
The price cuts ‘cheapened at least the perception of the brand,’ McCarthy said. ‘So this is a return to historical positioning.’
Pelton also intends to undergo a ‘significant and aggressive reduction’ of its retail footprint across North America next year.
The company currently operates 86 stores across the US and Canada.
It remains unknown how many will be shuttered as part of today’s plan for Peloton’s future.
Peloton is making other changes, including a return to in-person work.
Office employees will have to come in at least three days a week starting Sept. 6, McCarthy said Friday.
This type of return is in line with the approach used by other tech companies, such as Apple, but marks a sharp turn for a company that benefited from the work-from-home lifestyle.
McCarthy (left), a former Spotify and Netflix exec, vowed to cut costs, improve Peloton’s products and move increasingly to a subscription-based model.
The massive series of announcements today come six months after McCarthy was appointed CEO in a broader management reshuffling.
The former and Netflix Inc. executive vowed to cut costs, improve Peloton’s products and move increasingly to a subscription-based model. The former Spotify and Netflix executive vowed to cut costs, improve Peloton’s products and move increasingly to a subscription-based model.
The company ended the quarter with $2.96 million connected fitness subscribers, which are people who own one of the company’s products and pay for a membership to its live and on-demand workout classes.
“We have to make our revenues stop shrinking and start growing again,” McCarthy added at the end of Friday’s memo. “Cash is oxygen. Oxygen is life.”
Peloton is expected to report its fiscal fourth-quarter results on August 25.