Peloton has announced that they will lay-off roughly 780 workers as part of company’s latest restructuring plans. Moreover, the company has also decided to shut down a significant number of their retails stores in an effort to cut costs and improve profitability. In addition, Peloton has also planned to increase prices of some of their products.
780 jobs to be laid-off
Peloton Interactive, Inc. is an American exercise equipment and media company based in New York City. Their main products are Internet-connected stationary bicycles and treadmills. The company is going through turbulent times and are finding it difficult to maintain their profitability in post-pandemic era. Moreover, Peloton laid off around 2,800 employees in February this year amid drop in the share prices. Similarly, the fitness company has again decided to lay-off around 780 jobs during this phase of job cuts. Furthermore, they will cut a number of positions at their in-house support team, which are mainly located in Tempe, Arizona, and Plano, Texas.
Strategy of reducing cost and increasing profitability
Peloton will begin an aggressive reduction in their retail stores starting in 2023. However, the company has not shared any details regarding the exact number of stores which they are planning to close. Peloton said it will exit last-mile logistics by closing its remaining warehouses. Moreover, they intend to shift the delivery work to third-party vendors. In addition, the company will also raise the prices of their products including bicycles and treadmills. However, the prices for few of the products will remain same. “The shift of our final mile delivery to 3PLs will reduce our per-product delivery costs by up to 50% and will enable us to meet our delivery commitments in the most cost-efficient way possible.” Chief Executive Officer Barry McCarthy wrote in a memo to employees.
McCarthy tool over as CEO in February this year and announced to slash roughly $800 million in annual costs. Moreover, Peloton had also announced it would stop all its in-house manufacturing in July which resulted in about 570 job cuts.
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