Peloton has slipped after the pandemic surge, struggling to find a way to grow beyond sales of luxury fitness equipment.
Ezra Shaw/Getty Images
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Ezra Shaw/Getty Images
Peloton has slipped after the pandemic surge, struggling to find a way to grow beyond sales of luxury fitness equipment.
Ezra Shaw/Getty Images
In Peloton déjà vu, the fitness equipment company is cut 400 jobs and is looking for a new CEO as the company tries to shape a business model beyond selling expensive stationary bicycles.
Just two years ago, Peloton replaces co-founder John Foley in the CEO seat with Barry McCarthy, formerly of Netflix and Spotify. That change included layoffs of 2,800 employees, about a fifth of them, followed by other job cuts.
On Thursday, Peloton again announced layoffs — this time 15% of its workforce, or about 400 positions. It will continue to close physical showrooms. And now it is It was McCarthy’s turn to resign; Another CEO search begins.
McCarthy: “I once described spinning as a full-contact sport; intellectually challenging, emotionally draining, physically exhausting and all-consuming.” wrote on Thursday. “From where I sit today, that pretty much sums up my experience over the past two years.”
Regarding the layoffs, he said Peloton “simply has no other way to align spending with its revenue.”
The cost cuts come as Peloton tries to stop losing money and grow its identity as a seller of luxury fitness equipment. Under McCarthy, with its expertise in subscriptions, Peloton has tried to focus more on corporate wellness, eliminating the free app membership option and striking deals with companies like Lululemon Hotels and Hyatt.
McCarthy said Peloton can improve a key financial measure of free cash flow. But a registration revolution did not happen.
Peloton’s stock value has fallen more than 90% since the pandemic-era boom, when lockdowns prompted people to splurge on Peloton’s $2,000 stationary bikes plus monthly fees for the Video streaming classes. As people return to their gyms and fitness studios, Peloton’s equipment is gathering dust.
A series of safety crises followed. Peloton has been fighting federal officials over one finally recalled the treadmill. They caused dozens of incidents, including the death of a 6-year-old child. Peloton’s handling of all this has resulted fined 19 million USD. Last year, the company also nearly 2.2 million bicycles were recalled.
Peloton sales continued to stagnate during that time. Now, the company is approaching the deadline to refinance more than $1 billion in debt. Executives are confident the new restructuring plan will cut costs by more than $200 million by the end of fiscal 2025.
McCarthy will remain an advisor to Peloton through the end of the year.
