Peloton continues to ride an uncharted path.
On Thursday, the company announced 500 layoffs — its fourth round of cuts this year. The same day, The Wall Street Journal reported that CEO Barry McCarthy said that if the company isn’t able to make a significant turnaround in six months, Peloton may not be able to survive on its own.
“Please know this is a necessary step if we are going to save Peloton, and we are,” McCarthy said in an employee memo.
- Peloton now has around 3,800 employees.
- At one point last year, its headcount was at more than 8,600.
“The restructuring is done with today’s announcement,” McCarthy, who became CEO in February, told CNBC.
McCarthy told the Journal he believes the company can achieve its near-term growth targets, adding that the company has significantly reduced its cash spending.
“I can see in the numbers the business starting to change course,” McCarthy said. “Which is part of what gives me confidence when I say that I think this is the last step in the process.”
In August, Peloton reported $678.7 million in Q4 revenue, a 28% decline year-over-year. Its stock — $8.83 at market close Thursday — has dropped 90% from one year ago.
Peloton has recently announced deals with Amazon, Dick’s Sporting Goods, and Hilton, plus halted its in-house manufacturing, began equipment rentals, and raised its prices, among other strategies.
The company is reportedly exploring a sale of fitness equipment unit Precor, which it acquired in April 2021 for $420 million.