Peloton cuts more than 700 jobs, hikes prices on Bike+, Trad

Peloton is laying off 784 employees as the fitness giant looks to cut costs, improve efficiency and generate positive cash flow, according to a memo Friday from CEO Barry McCarthy. He emphasized that he will continue to recruit top talent in key areas of interest such as software engineering.

The company also announced that it will raise prices on its Bike+ and Tread products, significantly shrink its North American retail footprint and eliminate its last-mile distribution network.

According to McCarthy, the price of the Peloton Bike+ in the United States will increase by $500 to $2,495, while the price of the Peloton Tread will increase from $800 to $3,495. Meanwhile, shifting from last-mile delivery to third-party logistics partnerships can reduce Peloton’s per-product delivery costs by up to 50%.

Peloton will provide updates on which retail locations will close in the coming months. While the company doesn’t expect to close any retail locations in calendar 2022, McCarthy said the timing is uncertain as Peloton begins negotiations to exit the store lease.

The meditation app is silent and consumes 20% of the working power.

The changes come after Peloton earlier in February cut 2,800 jobs globally and announced an $800 million restructuring plan.

“These changes are necessary if Peloton is cash flow positive. Cash is oxygen. Oxygen is life. We simply need to be self-sufficient in cash flow.”

– Peloton CEO Barry McCarthy

“These changes are necessary if Peloton is going to be cash flow positive,” McCarthy said. “Cash is oxygen. Oxygen is life. We simply need to sustain ourselves with cash flow.”

In addition to the various changes, McCarthy said Peloton will require corporate employees to return to the office three days a week starting September 6, with a mandatory deadline of November 14.

“For those of you who want to return to office, we respect your choice,” McCarthy added. “We hope they will choose to stay, but we understand that not all of them will.”

Shares of Peloton are up more than 9% in Friday’s trading session since publication. However, until today, they have decreased by more than 60%.

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Peloton’s latest layoffs follow job cuts at companies including Walmart, Oracle and Robinhood in the past week.

Major companies that have laid off or frozen or paused employees include Meta, Twitter, Microsoft, Spotify, Netflix, Victoria’s Secret, 7-Eleven, Coinbase and Redfin.