Peloton is cutting jobs, closing stores and hiking prices2022-08-12 19:45 by Daniela
In a memo sent to employees on Friday, Peloton said it would cut 784 roles on its customer-service and distribution teams as it shutters its in-house logistics division. Going forward, the company will instead rely on third-party companies to deliver equipment and set it up in customers' homes.
In addition to the layoffs, Peloton will begin closing many of its retail showrooms next year, Bloomberg reported. The company also announced Friday it will raise prices on some of its equipment. The price of the Peloton Tread will go up by $800, while the high-end Bike+ will get a $500 price bump in the US. The company will implement price increases in other parts of the world as well.
The changes come during a tumultuous few months for the maker of exercise equipment, which has been trying to rejuvenate its business after sales slumped as concern over the COVID-19 pandemic eased. In February, the company cut around 2,800 jobs globally and named Barry McCarthy, a former executive at Spotify and Netflix, as its new CEO. Last month, Peloton also said it would stop manufacturing its exercise bikes in house and would instead rely on a third-party partner.
Peloton was a high-flyer early in the pandemic as Americans flocked to buy its products amid nationwide shutdowns. But as pandemic restrictions eased and people became more comfortable returning to the gym, Peloton's fortunes - and stock price - have waned.
"These are hard choices because we are impacting people's lives," McCarthy wrote in the memo. But, he added, "We simply must become self-sustaining on a cash flow basis."
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