Peloton has pulled back from a planned $400 million factory in Ohio. They are scrambling to cut costs due to sagging demand for its bikes and treadmills.
A Peloton spokesman confirmed that they are going to sell Peloton Output Park in Troy Township after the completion of external construction. In May 2021, Peloton announced to build $400 million facility on more than 200 acres in Ohio. They planned to start production at the new facility by 2023. The project came with great promise as the pandemic had an impact on the fitness industry. However, the demand of interactive bikes and treadmills dropped rapidly once the people started to resume the gyms. Similarly, the competition also increased among the producers of fitness products.
2,000 Potential Jobs are Lost
Peloton’s withdrawal from the investment also means that around 2,000 potential new jobs are in jeopardy. Last Tuesday Peloton also announced major restructuring which will result in cutting down 2,800 jobs. Alongside, the company’s co-founder and current CEO will also step down.
Shocking News for Ohio State Officials
Construction was already underway on the factory near Toledo. Peloton announced to finish work on the building’s shell and sell it and the surrounding land. The decision is a blow to state officials, including Republican Gov. Mike DeWine who attributed it as a big win. However, the constructed facility may still attract investments from different sources. Wood County Economic Development Executive Director Wade Gottschalk said the news surrounding Peloton for “a while”. The Tuesday news was a possibility. Still, he’s confident the site will be occupied as is they are considering it a great asset.
“We are forever thankful to Wood County, Troy Township, JobsOhio, the Ohio Development Services Agency and the Regional Growth Partnership for welcoming Peloton to the community and for their invaluable partnership”. A Peloton’s spokesperson stated in an announcement.
Despite the positive reception from investors, Peloton’s stock has plunged compared to early pandemic days. Demand for Peloton’s bikes and treadmills has slowed in recent months as gyms and other fitness facilities resume normal operations.
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