Peloton to Shed About 800 Jobs
Peloton Interactive Inc.
PTON 14.11%
plans to cut about 800 jobs as it looks to reduce its operating footprint and cut costs, the company said Friday.
The New York-based company said it would eliminate its North American field operations warehouses and make cuts within its member-support team, among other changes, resulting in the loss of 784 jobs. It also plans to scale back the retail operations it had been building out and raise the prices on some of its products in the U.S.
By cutting the warehouses, Peloton will move what it calls its final-mile delivery to third-party providers, Chief Executive Barry McCarthy said in an email to employees, a shift expected to reduce per-product delivery costs by up to 50%.
The cutbacks to the member-support team reflected lower-than-forecasted volume for inbound inquiries. Duties tied to these jobs will also shift to third-party providers, the memo said.
The moves announced by Mr. McCarthy, who took over as CEO earlier this year, come as Peloton is working on an $800 million restructuring plan in a bid to help turn around the business and create positive cash flow. It also comes after the company announced in February plans to shed 2,800 jobs.
“These are hard choices because we are impacting people’s lives,” Mr. McCarthy said. “These changes are essential if Peloton is ever going to become cash flow positive. Cash is oxygen. Oxygen is life. We simply must become self-sustaining on a cash flow basis.”
Peloton shares jumped more than 13% in Friday trading, but are still down about 62% this year.
Bloomberg earlier reported on Peloton’s plan to cut jobs. The layoff plan also comes as electronics retailer Best Buy Co. cut hundreds of jobs in stores over the past week amid shifting consumer habits and a steeper-than-expected decline in demand.
Mr. McCarthy said the price of its premium stationary bike, called the Bike+, will increase by $500 to $2,495, though the original stationary bike won’t have a price change. Its treadmill will go up $800 to $3,495. A prior price increase for its equipment took effect June 1.
Peloton said while it doesn’t plan on closing any retail stores this year, it will provide updates on which locations will be impacted in the “coming months,” the memo said.
The company has struggled to sustain demand after a boom in sales as Covid-19 health measures kept people away from gyms and consumers splurged on equipment and fitness lessons. It has since acknowledged a series of miscalculations in efforts to further expand the business in recent months.
The company has scrapped plans to move its manufacturing in house after seeing consumer interest slide.
Peloton is expected to release its fourth-quarter earnings report Aug. 25.
Write to Alex Harring at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Peloton Interactive Inc.
PTON 14.11%
plans to cut about 800 jobs as it looks to reduce its operating footprint and cut costs, the company said Friday.
The New York-based company said it would eliminate its North American field operations warehouses and make cuts within its member-support team, among other changes, resulting in the loss of 784 jobs. It also plans to scale back the retail operations it had been building out and raise the prices on some of its products in the U.S.
By cutting the warehouses, Peloton will move what it calls its final-mile delivery to third-party providers, Chief Executive Barry McCarthy said in an email to employees, a shift expected to reduce per-product delivery costs by up to 50%.
The cutbacks to the member-support team reflected lower-than-forecasted volume for inbound inquiries. Duties tied to these jobs will also shift to third-party providers, the memo said.
The moves announced by Mr. McCarthy, who took over as CEO earlier this year, come as Peloton is working on an $800 million restructuring plan in a bid to help turn around the business and create positive cash flow. It also comes after the company announced in February plans to shed 2,800 jobs.
“These are hard choices because we are impacting people’s lives,” Mr. McCarthy said. “These changes are essential if Peloton is ever going to become cash flow positive. Cash is oxygen. Oxygen is life. We simply must become self-sustaining on a cash flow basis.”
Peloton shares jumped more than 13% in Friday trading, but are still down about 62% this year.
Bloomberg earlier reported on Peloton’s plan to cut jobs. The layoff plan also comes as electronics retailer Best Buy Co. cut hundreds of jobs in stores over the past week amid shifting consumer habits and a steeper-than-expected decline in demand.
Mr. McCarthy said the price of its premium stationary bike, called the Bike+, will increase by $500 to $2,495, though the original stationary bike won’t have a price change. Its treadmill will go up $800 to $3,495. A prior price increase for its equipment took effect June 1.
Peloton said while it doesn’t plan on closing any retail stores this year, it will provide updates on which locations will be impacted in the “coming months,” the memo said.
The company has struggled to sustain demand after a boom in sales as Covid-19 health measures kept people away from gyms and consumers splurged on equipment and fitness lessons. It has since acknowledged a series of miscalculations in efforts to further expand the business in recent months.
The company has scrapped plans to move its manufacturing in house after seeing consumer interest slide.
Peloton is expected to release its fourth-quarter earnings report Aug. 25.
Write to Alex Harring at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Denial of responsibility! Techno Blender is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.