Business
Peloton to lay off 6% of global workforce in cost-cutting effort
The layoffs are part of a restructuring strategy to reorganize the company’s finances following a post-pandemic slump.
Peloton announced on Thursday that it will be gutting 6% of its global workforce as part of a broader cost-cutting measure. The fitness company also reported an unexpected fourth-quarter profit and plans to expand into the health and wellness market.
Peloton CEO Peter Stern said the layoffs are part of a cost-restructuring plan intended to save the company at least $100 million by the end of fiscal year 2026, as operating expenses “remain too high, which hinders our ability to invest in our future.”
“This is not a decision we came to lightly, as it impacts many talented team members, but we believe it is necessary for the long-term health of our business,” Stern wrote in a letter to shareholders on Thursday.
The announcement marks the sixth round of Peloton layoffs as the company, whose internet-connected exercise machines grew wildly popular during the COVID-19 quarantine, struggled to adjust to the post-pandemic market. Last year, former Peloton CEO Barry McCarthy stepped down after laying off more than 400 team members despite earlier promises that there would be no more job cuts.Peloton’s cost-cutting measures also came as the company reported fourth-quarter earnings of $606.9 million in revenue, ahead of the anticipated $579.8 million. The company also posted a net income of $21.6 million, compared to the loss of $30.5 million a year earlier.
During an earnings call, Peloton’s chief financial officer, Liz Coddington, said that half of the savings had already been realized through the job cuts, with the remainder expected over the coming months.
Peloton said that it will also shift its focus on “health span”, or the period of life a person lives in good health, as part of its evolution from a cardio fitness company to being ‘the world’s most trusted health partner’.
“Advances in medical science contributed to the prolonging of life here in the US by a remarkable 40 years from 1900 to 2020,” Stern said during the call. “However, as life span has increased, health span, the quality as opposed to quantity, of those years has failed to keep up. People are living longer, but they’re also living sicker in the US.”
Stern said Peloton would soon begin testing its platform to include nutritional content and provide users with custom wellness plans via AI and health tracking devices . The company will also invest more in personalised training programs, meditation, and sleep features.
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