Peloton is cutting 20% of its workforce, estimated to be around 2,800 jobs, according to the company’s CEO.
The fitness company’s reduction comes in an attempt to boost profitability while demand for the company’s fitness equipment diminishes and its stock market value dips.
“After careful review, we’ll be driving strategic initiatives across our global team that will help us focus on areas that are in need of adjustment,” wrote Peloton Executive Chairman John Foley in an email to staff, “including implementing a comprehensive restructuring program.”
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Foley announced that he was stepping down from his role as CEO and that Barry McCarthy, former CFO for Spotify and Netflix, would take over as CEO. Foley will continue to be Executive Chairman.
Foley was adamant that the job cuts would not affect Peloton’s instructors or content.
All laid-off employees would be provided benefits, including compensation, healthcare, and assistance transferring to other professions, Foley said. Layoffs are expected to begin on Tuesday.
The company also announced that it would “wind down” its plan to build the Peloton Output Park, a factory dedicated to producing Peloton products. The company will continue to rely on its third-party partners to “support our growth over the next few years.”
“I have always thought there has to be a better CEO for Peloton than me,” Foley told the Wall Street Journal. “Barry is more perfectly suited than anybody I could’ve imagined.”
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While Peloton saw a significant surge in product sales in 2020, demand has decreased significantly as of 2022. This has led to a substantial drop in the stock price in 2022, including a sudden drop in December seemingly connected to the death of a Sex and the City character. It’s also been accompanied by reports of companies such as Amazon and Nike considering acquisitions of the connected fitness company.
“We are open to exploring any opportunity that could create value for Peloton shareholders,” Foley told the Wall Street Journal, confirming that the company would consider such an acquisition.
