Peloton Interactive Inc. is laying off a significant amount of employees for the fourth time this year as part of an effort to save the struggling business, Chief Executive Officer Barry McCarthy told staff on Thursday.
The fitness technology company is cutting its workforce by roughly 500 globally, or 12 per cent, leaving it with about 3,825 employees. McCarthy said the company is making the move, along with other reductions in operating expenses, in order to reach the break-even point on cash flow by the end of fiscal 2023.
“We lost more than $100 million on retail last year, which is why we must restructure this segment of the business,” McCarthy told staff. “Our commitment is to provide updates on which retail operations will be impacted by this decision in the coming months as our analysis and negotiations with landlords progress.”
McCarthy is counting on partnerships, sales of digital app subscriptions and a shift to pushing content to third-party devices to bring in more revenue. I am acutely aware many of those impacted by these changes aren’t just colleagues but are also close friends. I know many of you will feel angry, frustrated and emotionally drained by today’s news, but please know this is a necessary step if we are going to save Peloton, and we are.The final building block, which I have previously outlined, is the right-sizing of our retail footprint.
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