RAPID EXPANSION STRIKES AGAIN.
Peloton isn’t doing too well. And now, that has forced the company to both lay off 2,800 employees worldwide, cancel plans for a US factory, and also cause the CEO to resign.
As discussed previously, Peloton has faced not only the waning interest in their products, but also a few controversies. And as a result of all of that, they’ve let go of roughly 20% of their corporate staff, as well as cancel plans to build Peloton Output Park. Notably, this is not a reduction in class instructors, so if you’re subscribed to their service, you’re not getting shafted.
Right-size the organization by enacting a workforce reduction. The workforce reduction will occur across nearly all business operations to streamline reporting structures and create clearer lines of accountability. This will result in the reduction of approximately 2,800 global positions. Corporate positions will be reduced by approximately 20%. With regard to operations in the field, the company is reducing its owned and operated warehouses and delivery teams and expanding its commercial agreements with third party logistics providers.
Peloton’s roster of instructors and breadth and depth of its content will not be impacted by the initiatives announced today.
In addition to all of that, CEO and Peloton co-founder John Foley is stepping down from his position, though he’ll continue on with the company as a company executive chair. His replacement is Barry McCarthy, a former CFO for Spotify and Netflix.
Of the changes, Foley said the following in a letter to shareholders:
Our objective is clear: we are taking steps to best position Peloton for sustainable growth, while also establishing a clear path to consistent profitability. The comprehensive restructuring actions we are announcing today will streamline our teams and reporting structures, increase P&L accountability, create a more efficient and flexible supply chain, and enforce greater investment discipline to ensure our spending meets appropriate return thresholds.
John Foley
Source: PC Mag
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