In August, Peloton released an abysmal financial report for the quarter, indicating a loss in excess of $1.2 billion on 30 percent lower year-over-year revenue. At that time, Peloton CEO Barry McCarthy announced they would be laying off 800 employees in order to improve efficiency and overall agility. Moving forward, though, the exercise equipment startup has announced a new round of layoffs to further address its financial struggles.
In a statement, the company said, “a key aspect of Peloton’s transformation journey is optimizing efficiencies and implementing cost savings to simplify our business and achieve break-even cash flow by the end of our fiscal year.”
The new round of layoffs amounts to about 12 percent of the staff, which will leave the company roster at about 4,000. This is less than half of the workers the company employed during their peak of operations last year. And while cuts have been made broadly across the company, the bulk of them appear to be in the marketing department.
In a staff memo titled: “A Difficult, But Critical Pivot to Growth”, the company called this a “necessary step if we are going to save Peloton, and we are.”
McCarthy has also detailed that the company has already managed to cut costs by slashing some jobs as well as outsourcing their entire manufacturing process. He goes on to say, “Together, we have dramatically restructured Peloton’s business. You should be incredibly proud of what we have accomplished. This has not been easy.” Indeed it has not, as Peloton’s retail operations has lost at least $100 million just last year, alone. This has, actually, contributed to the company announcing the closure of at least 86 retail stores in North America.
All in all, though, McCarthy also notes that these most recent cuts “marks the completion of the vast majority of our restructuring plan” which began in February of this year, just after McCarthy took over as CEO. This restructuring includes outsourcing everything from customer service to delivery (which has always been done by Peloton staff). Peloton has also, recently, tried to expand its reach by partnering with retailers like Amazon and Dick’s Sporting Goods.
