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Peloton has announced a new round of layoffs that will cut about 400 jobs, or roughly 15% of the company’s workforce.
The new layoffs are meant to reflect the “current size” of business, Peloton said. They’ll reportedly ensure positive free cash flow while allowing for investment in new products. The move is expected to cut yearly run-rate expenses by over $200 million by the end of the company’s fiscal 2025.
Accordingly, Peloton said it would keep shrinking its retail presence, and would look for a “more targeted and efficient” way to reach international markets.
The fitness tech maker also revealed that Barry McCarthy was stepping down as CEO, President, and Board Director. He’ll remain as a strategic advisor to Peloton for the rest of 2024. Chairwoman Karen Boone and Director Chris Bruzzo will act as interim CEOs until a replacement for McCarthy is available.
The layoffs and executive changes came as Peloton reported a tough fiscal third quarter. It posted a $167.3 million loss that stemmed from both losing 100,000 subscribers year-over-year (now at 6.6 million) and a 14% drop in revenue from its connected fitness gear.
The past few years have been tumultuous for Peloton. It boomed during the pandemic as people raced to buy home exercise bikes and treadmills, but ran into trouble as the recovery began and customers returned to the gym. The company slashed 2,800 jobs at the start of 2022, and brought McCarthy out of retirement to replace departing chief John Foley.
The company has faced additional pressure. It had to recall the Tread in 2021 over injury risks. There has also been a wave of lower-cost equipment and subscriptions, such as Echelon bikes and Apple’s Fitness+ service. Peloton is still a household name, but the layoffs and leadership change may be important to remaining competitive.
