Peloton’s fitness company plans to cut about 15% of its global workforce, and Peloton’s chief executive officer will step down from his position.
Secretary of State Barry McCarthy notified Peloton’s approximately 3,500 employees in a letter of his resignation. Note On Thursday morning, he sent out that his “only lasting legacy in Peloton” is the “fantastic lead team” he has recruited since taking the top job in 2022.
“The stock market hasn’t realized this yet, but it will eventually. It’s just a matter of time,” McCarthy said, referring to the nearly 45% decline in stock price that Peloton has experienced so far this year. he added.
“While the decision to make additional layoffs is difficult, Peloton had no choice but to align spending with revenue,” McCarthy added of the upcoming layoffs.
McCarthy, who has signed deals with Lululemon, Amazon and Dick’s Sporting Goods during his tenure, said the cuts are the only way to generate positive free cash flow.
“Achieving positive FCF makes Peloton a more attractive borrower, which is important as the company focuses on the necessary task of successfully refinancing its debt.”
News of McCarthy’s departure comes as Peloton reported a 4% decline in revenue to $717.7 million in its most recent quarter.
Peloton stock fell 2.5% to $3.14.
Peloton announced that its revenue fell to $744 million last quarter. That’s down 6% from a year ago and 34% from two years ago, as exercise class companies struggled to continue through the heat of the pandemic. A customer purchased a home exercise bike during the coronavirus lockdown.
At the time, Peloton also lowered its fourth-quarter revenue forecast to a range of $700 million to $725 million, below analysts’ expectations of $750 million.
The company also lowered its full-year forecast to a range of $2.68 billion to $2.75 billion, down from its previous forecast of $2.8 billion.
In a last-ditch effort to boost revenue, on Wednesday, his final day as CEO, New York City-based Peloton announced a partnership with Hyatt Hotels that will allow World of Hyatt loyalty members to enjoy Peloton at Hyatt properties. provided points when using the equipment.
According to a press release about the partnership, the partnership will see more than 800 Hyatt properties decked out with Peloton amenities and access to Peloton classes via in-room TVs.
To access these classes at home while using a Peloton stationary bike or treadmill, after purchasing the actual equipment, customers must pay $24 per month to use the Peloton App+.
For reference, a new Peloton bike retails for between $1,445 and $2,495, depending on the model, and a treadmill, called the Peloton Tread, costs between $2,995 and $5,995.
Peloton also offers rowing machines for a hefty $2.995.
Strength training, yoga, outdoor running, and gym workout classes are also offered via the app for a more affordable $12.99 per month.
