Indoor training platform Peloton has announced a 15 per cent cut in its workforce, totalling around 400 positions, and its CEO Barry McCarthy has resigned in the latest bad news for the company.
Its share price has dropped from a high of over $160 in December 2020 to an average of $3 in recent months, while its stock market value has dropped from over $50bn to $1.1bn. In the wake of the news on Thursday morning, it fell from $3.60 to $2.80 over a few hours but has since rebounded to $3.13 today. The company has not made a profit since the height of the pandemic in December 2020.
McCarthy, who joined Peloton in February 2022, claimed that the latest job cuts were necessary to bring spending in line with revenue, and are part of a restructuring that aims to reduce annual expenditure by $200 million. Since 2022, according to The Verge, Peloton has made five round of cuts to its workforce, which has dropped from a peak of 8,600 to around 3,000.
As we reported in February, Peloton reported a net loss of almost $195m for quarter four of 2023 on revenues of $744m, with McCarthy at the time calling out the poor service offered by the company’s Member Support department and a range of misfiring initiatives such as its University of Michigan co-branded bikes.
Despite this, it still claims around three million Connected Fitness subscribers and over 700,000 Peloton App users. The net loss for the quarter ended March 2024 was slightly lower than in Q4 2023 at $167m.
Peloton is best known for its connected exercise bikes, which were a huge hit during the Covid-19 pandemic since it offered an at-home alternative to then-closed gyms. Peloton also offers its app which you can use to follow its online exercises on your own equipment. We reviewed the Peloton Bike+ back in 2022, and despite some concerns about the pricing model, the software impressed us.
The brand also sells a treadmill, although that was subject to a recall in 2021 after a the death of a six-year-old child, while supply chain issues affected pandemic deliveries of its bikes. It also sells a rowing machine in the USA.
Other issues include a stop ride notice issued in May last year, which resulted in a voluntary recall of almost 2.2 million Peloton Bikes, due to a fault in the seatpost which could cause it to break.
