How Peloton plans to revive its fortunes as demand swoons
US exercise equipment company to close stores, raise prices and cut about 800 jobs
Peloton Interactive said on Friday it would cut jobs, shut stores and raise prices on its exercise equipment including treadmills and top-end bikes as it undertakes a companywide revamp to shore up its revenue and improve cash flow.
Shares of the company surged about 11% in afternoon trade after the company said in a memo it would cut about 800 jobs and reduce its retail presence in North America.
Under CEO Barry McCarthy, Peloton has implemented a slew of measures including cost cuts to steady its business as a pandemic-driven demand for its treadmills and exercise bikes quickly fizzles.
On Friday, the company outlined a plan to aggressively reduce its retail presence in the US and eliminate a number of jobs in warehouses and customer support teams.
Shifting final mile delivery to third-party logistics providers will reduce per-product delivery costs by up to 50%, McCarthy said in the memo seen by Reuters.
The company is also raising prices of its Bike+ and Tread machines in five markets, including the US and Canada.
The company, which lowered the prices for its products earlier this year, said it would now raise prices by $500 to $2,495 on Bike+ and by $800 to $3,495 on Tread in the US.
McCarthy, a former Netflix executive, said he was aiming to boost Peloton’s software engineering team, terming it as “right investments” to drive growth.
Reuters