At-home gym equipment and real-time fitness app company Peloton is counting on additional workforce reductions — the fourth round of companywide layoffs this year — to stay afloat amid mounting revenue losses.
The demand for Peloton’s connected at-home fitness equipment has plunged along with the number of subscribers to its live-streamed, encore and on-demand fitness classes, the Wall Street Journal reported Thursday (Oct. 6).
Eight months into the job as the new boss of Peloton, CEO Barry McCarthy — former CFO at Spotify and Netflix — said the company has six months to put up the numbers to show it can operate as an independent organization now that people have re-established everyday post-pandemic routines and embraced new behaviors.
See also: Peloton Targets Exercise-Hungry Travelers With Hilton Partnership
Following the latest staff cuts, Peloton will have a workforce of about 3,800 employees worldwide, which is roughly 50% less than its top talent number last year, the Journal reported. The latest companywide staff cuts are concentrated in the marketing department, which McCarthy told the Journal is bloated for a company its size.
Peloton staffed about 3,700 people when the global pandemic started in March 2020 and expanded to over 8,600 people in 2021, having also acquired equipment manufacturing operations as it hustled to meet the sudden demand.
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“There comes a point in time when we’ve either been successful or we have not,” McCarthy said. “We need to grow to get the business to a sustainable level.”
Quarterly losses mounted for the past six consecutive quarters, with Peloton posting a fourth-quarter loss in August 2022 of $1.2 billion as the company struggled to unload excess inventory. Revenue in the fourth quarter fell 28% from the same period a year earlier to $679 million, Peloton said in the August shareholder letter.
In an internal memo to staff provided by Peloton to the Journal, McCarthy said he knows employees receiving news about the staff cuts will “feel angry, frustrated, and emotionally drained,” but he called the move a “necessary step if we are going to save Peloton, and we are.”
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