Barry McCarthy, CEO of Peloton, told staff in a memo on Thursday that the company is cutting another 500 jobs as it tries to turn around its struggling connected fitness business. The company has lost money for six quarters in a row and McCarthy says it has six months to get back on its feet.
Around 2,800 employees were let go in February, 500 in July, and 800 in August of this year. The company will now have around 3,800 employees worldwide. It is a big drop from the peak of 8,600 employees last year, but not far off from the 3,700 people the WSJ notes it employed around the start of the Pandemic. Employees who work in marketing are most likely to be affected by today's cuts.
When we have either been successful or unsuccessful, there comes a point.
In an interview with the WSJ, McCarthy said that there comes a point in time when the company has either been successful or unsuccessful. The company has cut staff and made other changes to reduce costs. As it shifts towards third-party distributors, it now sells equipment and apparel through Amazon and Dick's. The company plans to close its retail showrooms and outsourcing the production of its bikes and treadmills.
The cuts aren't enough to put the company back in the black The company reported a $1.2 billion operating loss, a decline in membership, and a 28 percent drop in revenue. McCarthy said that today's cuts were its last major move to reduce operating costs, with increasing revenue being the focus going forward.
Many tech companies have either announced job cuts or hiring freezes this year, but Peloton has been particularly badly hit by the end of the Pandemic. In the last few months, many people have been able to return the public gym and other forms of exercise that were not available during the Pandemic. It's difficult to sell expensive exercise equipment in a time of high inflation and uncertainty.
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