Exercise and fitness equi pment major Peloton has announced it is laying off as many as 500 employees, or around 12 percent of its workforce.
CEO Barry McCarthy said the company is trying to reach break-even cash flow by the end of the 2023 fiscal year and that the latest layoff is meant to help the process. “I am acutely aware many of those impacted by these changes aren’t just colleagues but are also close friends … I know many of you will feel angry, frustrated and emotionally drained by today’s news, but please know this is a necessary step if we are going to save Peloton, and we are,” McCarthy wrote in a memo, Engadget reported.
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This is the fourth round of job cuts at Peloton after McCarthy took over as CEO. All these job cuts happened this year and resulted in more than 4,500 people losing jobs.
The first major layoff was in February, when the newly installed CEO eliminated more than 2,800 positions. The next round of trimming happened in July, when Peloton laid off 570 people. This was followed by a job cull in August, which saw some 784 employees walking down the garden path.
Surprisingly, McCarthy was upset that there was criticism of the aggressive job cuts at Peloton. The CEO mused aloud why the sacked employees and the financial media did not appreciate the jib cuts.
He said the media reports “accentuated the negative” from his lay-off announcement and that he was expecting that the story of ‘redemption’ of Peloton would have been discussed by the media.
“We were expecting a story about redemption and the successful turnaround of Peloton, which is why we invested time on background briefing them on the state of our turnaround,” he said, according to The Verge. He specifically accused the Wall Street Journal of ‘creating the wrong impression’ about the company.
“The headline should have been that recent strong execution and today’s restructuring have positioned us to meet our fiscal year-end goal of break-even cash flow, with a renewed focus on accelerating our growth,” McCarthy said.
He went on to say that the WSJ article created the impression that Peloton has ‘six months to live’, which he said was “at odds with the story we told and the state of the business.”
In August, the company said following the exit from owned-manufacturing in Taiwan, it was restructuring final mile delivery capabilities by expanding our work with our third party logistics (3PLs) providers.
“As a result, we are eliminating our North American Field Ops warehouses, resulting in a significant reduction in our delivery workforce teams,” McCarthy had said then.