In February, we wrote about Peloton after the fitness technology company fired 2,800 employees as the founder resigned as CEO. The once-valued $50 billion tech giant has been on the wall. Even as the company continues to bleed millions of dollars in losses, the company continues to kick the can down the road.
The exercise company has gone through another round of layoffs this year, with the news that it is eliminating 500 jobs as part of its effort to cut costs and stay afloat. It might already be too late for the company.
Peloton said today's cuts marks the completion of the vast majority of our restructuring plan, which began in February 2022, after CEO Barry McCarthy assumed the position.
The company said in a statement that the company said that the 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 the fiscal year. McCarthy told employees that this is a necessary step if we are going to save Peloton, and we are. He said that the retail operations of the company lost more than $100 million last year. In August of this year, the company announced that it was closing a large amount of its 86 retail stores in North America.
Together we have dramatically restructured Peloton's business. You should be proud of what we have accomplished. This hasn't been easy, wrote McCarthy.
Peloton's problems started over three years ago. Things changed quickly for the company in early 2020. Peloton was one of the best performing stocks since the pandemic began in 2020, as gym closures boosted demand for home fitness products. With gyms now opening, demand has fallen off a cliff.
Peloton's death would come a year later. Peloton's business took a huge hit as gyms reopen and vaccines become available. Peloton saw the demands for its products fall off a cliff. Its stock price lost about two-thirds of its value since its peak and its path to profitability is now more uncertain than ever.
The company temporarily stopped production of its Bikes and treadmills as demand wanes and the company looks to control costs. A Peloton spokeswoman wouldn't say anything.