“This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline,” the company said in a press release. Layoffs also begin Tuesday.
Peloton also noted that it’s “winding down the development” of its first US factory in Ohio, which the company announced in May 2021, helping save $60 million.
It noted that on-camera instructors and content “will not be impacted by the initiatives announced today.”
Peloton’s shares have plunged more than 80% from their high in January 2021. They’ve come under renewed pressure in recent weeks following a report that the company had stopped manufacturing new bikes and treadmills.
In a statement Tuesday, Blackwells said the changes don’t go far enough, arguing Foley has “proven he is not suited to lead Peloton, whether as CEO or executive chair, and he should not be hand-picking directors, as he appears to have done today.” Blackwells said it will keep pushing for “strategic alternatives process to maximize value for the benefit of all shareholders.”
In an note to investors Tuesday, Neil Saunders, managing director of GlobalData, said that Peloton is “now a business in crisis mode.” The changes is the “latest in a long string of maneuvers as it scrambles to get the business back on the rails.”
“Peloton has spent vast amounts of money on stores, factories, warehouses and other facilities to service demand that is now unlikely to materialize. The first step of the new CEO, Barry McCarthy, should be to slash costs to right-size the business,” Saunders said, adding that a sale would “put Peloton on a much more secure footing.”
Correction: An earlier version of this story mischaracterized Peloton’s layoffs. The company is laying off 2,800 employees, including 20% of its corporate positions
