Business
Peloton Cutting About 400 Jobs Worldwide; CEO McCarthy Stepping Down
Peloton is shedding approximately 400 jobs worldwide as part of a restructuring exercise, and its CEO, Barry McCarthy, is stepping down after two years as the company works to turn around its business.
Shares fell approximately 2% in morning trading to $3.16.
Peloton has been working on a major rebranding effort since last year, transitioning from a vendor of luxury workout bikes and equipment to a health technology provider for all.
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Peloton Cutting About 400 Jobs Worldwide; CEO McCarthy Stepping Down
During the coronavirus outbreak, the New York corporation enjoyed extraordinary sales growth. Its stock price increased by more than fivefold in 2020 as lockdowns made its expensive bikes and treadmills popular among clients who pay a monthly subscription to partake in interactive workouts.
However, sales began to decline in 2021 as vaccines permitted individuals to leave their houses more freely, including for gym visits.
The corporation lost $1.26 billion in the fiscal year ending in June, plus an extra $350 million in the six months ending in December. In fiscal 2023, free cash flow, or the amount left over after paying corporate expenses, was negative $470 million.
The losses continue. Peloton disclosed on Thursday that the company lost $167.3 million in the third quarter or 45 cents per share. While this is better than the $275.9 million loss, or 79 cents per share, announced a year ago, it is still below the 39 cent loss that Zacks Investment Research analysts had predicted. Revenue was $717.7 million, below Wall Street’s estimate of $719.9 million.
It decreased its full-year sales projection by $25 million to $2.675 billion to $2.7 billion, down from $2.8 billion last year.
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Peloton Cutting About 400 Jobs Worldwide; CEO McCarthy Stepping Down
Peloton Interactive Inc. announced Thursday that the job cuts represent around 15% of its global workforce. The restructuring initiatives, intended to reduce annual run-rate expenses by more than $200 million by the end of fiscal 2025, include continuing retail showroom closures.
The job losses are just the latest round for the corporation, which said in October 2022 that it would lose around 500 jobs in addition to the almost 800 layoffs it made in August of the same year.
McCarthy had taken over as CEO from founder John Foley to turn around a company that had endured multiple setbacks, ranging from marketing mistakes to recalls. At Peloton, he worked hard to change the company’s focus from expensive hardware to software and a fee-based app.
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Peloton Cutting About 400 Jobs Worldwide; CEO McCarthy Stepping Down
McCarthy wrote in an email to Peloton’s team this morning that the recently announced job layoffs were a time of “dealing with the world as it is and not as we want it to be.”
“Hard as the decision has been to make additional headcount cuts, Peloton simply had no other way to bring its spending in line with its revenue,” he said in a statement.
Peloton announced that Chairperson Karen Boone and Director Chris Bruzzo will serve as interim co-CEOs while it searches for its next CEO. Jay Hoag, a board member, will become the new chairwoman.
SOURCE – (AP)
