In a move reflecting ongoing financial challenges, indoor training platform Peloton has revealed plans to cut 15 percent of its workforce, equating to approximately 400 positions, alongside the resignation of CEO Barry McCarthy.
The company’s stock price has experienced a dramatic decline, plummeting from its peak of over $160 in December 2020 to an average of $3 in recent months. Consequently, Peloton’s market value has tumbled from over $50 billion to $1.1 billion. Following Thursday morning’s announcement, the stock briefly dipped from $3.60 to $2.80 before rebounding to $3.13. Peloton has not recorded a profit since December 2020, amidst the height of the pandemic. McCarthy emphasized the necessity of the job cuts to align spending with revenue, marking part of a broader restructuring initiative aimed at slashing annual expenditure by $200 million. Since 2022, Peloton has executed five rounds of workforce reductions, resulting in a reduction from its peak of 8,600 employees to approximately 3,000.
Despite boasting around three million Connected Fitness subscribers and over 700,000 Peloton App users, the company reported a net loss of nearly $195 million for the fourth quarter of 2023 on revenues of $744 million. McCarthy cited shortcomings in the Member Support department and unsuccessful ventures like the University of Michigan co-branded bikes as contributing factors. Amidst ongoing challenges, including supply chain disruptions and product recalls, Peloton remains focused on navigating turbulent waters while maintaining its position in the fitness market.
