Peloton fired 2,800 workers, but hit with a free membership


Peloton plans to sever about 2,800 workers, but a 12-month free Peloton membership has eased the blow.

of Announce plan on Tuesday Headquartered in New York, the company’s on-camera instructors and content are “unaffected by the initiative announced today” to reduce employment for about 2,800 people worldwide, including about 20% of corporate positions. Said.

Fitness and tech companies said they were suffering from a fair share of “challenge / pivot / unexpected” as well as continued supply chain disruptions and delays in delivery during the COVID-19 pandemic. rice field.

“We recently shared that we are reassessing costs across the organization to ensure that they are properly configured for the post-COVID situation,” said Peloton’s co-founder and executive chair. John Foley said: Attention to employees.

“After careful consideration, we will drive strategic initiatives across the global team to help focus on areas that need coordination, such as implementing a comprehensive restructuring program.”

“As part of this program, we made the difficult decision to reduce the size of the Peloton team by about 2,800 positions worldwide. We are making changes at all levels of the organization, including within the leadership team,” Foley said. I am.

As part of its severance pay, the company said it would provide North American employees with cash compensation (based on their tenure and job title). Healthcare (but no period specified). Free Peloton membership for an additional 12 months to ease the blow.

The company is also undergoing leadership changes, including Foley’s resignation from his role as chairman. Barry McCarthy, a former executive at companies such as Spotify and Netflix, will replace him.

William Lynch, President of Peloton, who has played that role since 2017, will resign immediately but will remain on the board as a non-executive director.

Foley’s wife, Jill, who was vice president of apparel, has also resigned from her role.

Peloton also said it was “reducing development” in the Peloton Output Park manufacturing plan Ohio, which it announced in May 2021. The company estimates that this will save $ 60 million.

“We will optimize our logistics network by reducing the warehousing and delivery footprint we own and operate while expanding our relationships with third parties,” Peloton said.

A layoff of 2,800 people occurs in almost every business of the company, reducing the company’s position by about 20%.

“For operations in this area, the company is reducing its warehousing and delivery teams it owns and operates, and is expanding its commercial contracts with third-party logistics providers,” said Peloton.

When the above actions are taken, Peloton hopes to achieve an annual execution rate cost reduction of at least $ 800 million and reduce capital spending planned for 2022 by approximately $ 150 million. I said there is.

COVID-19 At the peak of the pandemic, Peloton’s Sales surge With the gym closed, more and more people are turning to high-tech home fitness bikes, treadmills, or training apps.

However, Peloton’s interests are not as well-suited as countries around the world are working to ease or completely abolish blockade restrictions.

Since January 2021, the company’s stock price has fallen by 80% and the company has lost. $ 439 million In the last quarter.

Foley on Tuesday acknowledged these challenges in a memo to employees.

“We navigated COVID-19 together, did our best to meet unprecedented demand, expanded our team and expanded our product portfolio,” he said. “But these investments are no longer in line with future business operations intent, as demand after COVID appears to be different than expected.”

Peloton’s share price rose 25.28% on Wednesday to $ 37.27.

Catabella Roberts

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Katabella Roberts is a reporter currently based in Turkey. She focuses primarily on the United States and covers the news and business of The Epoch Times.

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