In an effort to continue to drive the business forward and achieve cash flow breakeven by the end of the current FY23, Peloton is laying off more employees. On Oct. 6, the connected fitness company announced another round of job cuts, the fourth in 2022. The latest action – the elimination of 500 global positions or an estimated 12 percent of its workforce—follows 2,800 job cuts in February, another 750 in July and 800 in August as the company aims to trim expenses and put itself back on a growth path. In a prepared statement, CEO Barry McCarthy called the newest job eliminations “the final phase of the company’s transformation journey.”
Over the last four weeks, Peloton’s co-founder John Foley, executive chair, and chief legal officer Hisao Kushi have resigned from the company that lost more than $2.8 billion in the fiscal year ended June 30 on an 11 percent revenue decline to $3.58 billion.
“The changes we have made, combined with the performance of the business, are moving us closer to our fiscal year-end goal of break-even cash flow, with a renewed focus on growth,” McCarthy said. “We are in the business of driving performance, and the business is indeed performing. By any measure, we have made remarkable progress in record time.”
In recent weeks, after announcing it only expected a $6 million benefit on a net basis from ongoing inventory liquidations, Peloton has struck distribution deals with Amazon and U.S.-based retail chain Dick’s Sporting Goods, teamed up with the Hilton Hotels group and introduced what it hopes will be a game-changing rower.
It’s unclear if the group’s first quarter outlook has been improved by the latest action, which Wall Street applauded by sending Peloton shares up 4 percent yesterday. In late August, Peloton forecasted an adjusted Ebitda loss of $90 to $115 million in the first quarter on a 19.3 to 22.4 percent decline in period revenues to a range of $625 to $650 million.
Peloton is expected to address its money-losing retail business, which lost more than $100 million in the last FY, in 2023.
