Peloton is cutting 12% of its remaining workforce in its fourth round of layoffs this very year. This news is coming as the fitness company just finished completing its restructuring and is now shifting its focus back to growth.
Peloton Is Cutting 12% of Its Remaining Workforce
Fitness Company Peloton is planning to cut down yet another 500 jobs or up to 12% of its own workforce, the company said on Thursday, in a bid to turn the company around. This move firstly was reported by CNBC and The Wall Street Journal.
The financial outlook of Peloton over the previous year has reportedly and steadily declined, with the company back in august reporting six quarters of consecutive losses and this is including $1.2 billion in losses during the June quarter and $2.8 billion over the year that ended in the month of June. And it is not only the sales of new types of equipment that are down, the subscriber base of peloton also has been stagnant in recent months.
Peloton Struggles with the Covid-19 Aftermath
These very challenges are following up with the boom period of Peloton during the first months of the COVID-19 pandemic. As customers found themselves stuck indoors, they had to look for alternative means to exercise, and peloton bikes at the time offered an appealing solution, with a screen mounted to the stationary bike and also a subscription service that allows users to play live and on-demand classes, consumers were drawn toward the product. But consumers at the moment are resuming pre-COVID routines and characters, going back to gyms and in-person classes, and that has now proved to be detrimental for the fitness company.
And in a bid to turn things around in the company, Peloton has had many rounds of layoffs, with the recent announcement marking the fourth round of job cuts this year for the company.
What the Company Has To Say about the Cuts
“A key aspect of Peloton’s transformation journey is optimizing efficiencies and implementing cost savings to simplify our business and achieve break-even cash flow by the end of our fiscal year,” a spokesperson from the company told CNET. “Decisions like this are incredibly difficult and Peloton is doing all we can to help our impacted colleagues. As we pivot to growth, today marks the completion of the vast majority of our restructuring plan we began in February 2022.”
The completion of that very restructuring strategy marks a pivotal point for the firm, which just recently entered into partnerships with Dick’s Sporting Goods, Hilton, and Amazon.
Pelotons New CEO’s Assertion of the Turnaround Strategy
The next step for peloton is to focus on growth, CEO Barry McCarthy who has been the CEO since February told CNBC. “I’m feeling about as optimistic as I’ve ever felt,” McCarthy stated.
Peloton now must prove its changes in strategy will help the company grow, and it will need to assess where the company stands in six months times, McCarthy said. And if it fails to return to growth following all the changes made, he suggested, peloton may not be able to be a stand-alone company as per The Wall Street Journal.
“With today’s announcement, the bulk of our restructuring work is complete,” McCarthy in an internal memo to employees said. “I am acutely aware many of those impacted by these changes aren’t just colleagues but are also close friends. I know many of you will feel angry, frustrated, and emotionally drained by today’s news, but please know this is a necessary step if we are going to save Peloton, and we are.”