According to a memo from chief executive Barry McCarthy, Peloton is laying off 784 employees as the fitness giant tries to cut costs and improve efficiency. He stated that the company would continue to recruit top talent in key areas of need, such as software engineering.
In addition to that, the company has announced that it will increase prices on its Bike, Bike and Tread products, reduce its North American retail footprint and eliminate its final mile distribution network.
According to McCarthy, the price of the Peloton Bike in the United States will go up by $500 to $2,495, and the price of the Peloton Tread will increase by $800 to $3,495. The move from its final mile delivery to its third party logistics partnerships will reduce Peloton's per-product delivery costs by up to 50%.
Peloton will provide updates on which retail locations will close in the coming months. McCarthy said the timing is uncertain as Peloton begins negotiations to leave store leases, as the company does not anticipate closing retail locations in calendar 2022.
In February, Peloton had previously cut 2,800 jobs and announced an $800 million restructuring plan.
The changes are essential if Peloton is going to become cash flow positive, according to McCarthy. Cash is oxygen. We need to be self-sustaining on a cash flow basis. In addition to the various changes, McCarthy said that Peloton would ask its corporate workers to return to the office three days per week starting Sept. 6 with a mandatory deadline starting Nov. 14.
McCarthy said that for those of you who don't want to return to the office, we respect your choice. We hope you stay, but we understand that not everyone will. Peloton shares went up more than 9% during Friday's trading session, as of the time of publication. They are down more than 60% year to date.
Peloton was laid off after job cuts at companies like Walmart, Oracle and Robinhood last week.
Other major companies that have laid off employees or slowed or paused hiring include Spotify, Microsoft, Meta, Twitter, Microsoft, Spotify, Netflix, Victoria's Secret, 7-Eleven, Coinbase and Redfin.