Peloton is laying off employees and raising prices for some of its equipment as part of its latest bid to make the business profitable and free up cash.
The changes were disclosed Friday in a memo to employees of the maker of high-end exercise bikes and treadmills from its new CEO Barry McCarthy. In addition to cutting 784 jobs, Peloton will close its North America distribution network and shift its delivery work to third-party providers.
The New York-based company said it also plans to "significantly" reduce its North American store base, which now numbers 86. But it didn't say how many locations will close.
The moves mark the latest changes since McCarthy, who served as chief financial officer at Spotify, took over as CEO in February. He replaces John Foley, who co-founded the business 10 years ago.
The coronavirus pandemic set Peloton on a wild ride. Its shares surged more than 400 per cent in 2020 amid lockdowns that made its bikes and treadmills popular among customers who pay a fee to participate in Peloton's interactive workouts.
But nearly all of those gains were wiped out last year as the distribution of vaccines sent many people out of their homes and back into gyms. Now, the company, which recorded its only profitable quarters during the pandemic, is reining in ambitious plans and lowering costs after badly misjudging the staying power of the exercise-at-home trend.
Peloton said it is raising the price of its flagship Bike+ by US$500 to US$2,495 and its Tread treadmill by US$800 to US$3,495. The price increases represent an about-face from April, when it was lowering prices to try to get rid of inventory. McCarthy noted in the memo that at the time, the company was still in the early days of its US$800 million restructuring plan and was under "considerable cash flow pressure."
Last month, Peloton announced it will stop making its own interactive stationary bikes and treadmills, outsourcing those duties to a Taiwanese manufacturer. It also said it was also suspending manufacturing operations at the Tonic Fitness Technology plant in Taiwan for the rest of the year.
As of June 30 of last year, Peloton employed about 8,600 people worldwide, including about 6,700 in the U.S. But in February, it said it was cutting 2,800 jobs, including about 20 per cent of its corporate jobs. At the time, it said instructors who lead interactive classes for Peloton would not be included in cuts.
Peloton also said in February it was winding down the development of its Peloton Output Park factory in Ohio.
Friday's news cheered investors, who sent shares in Peloton Interactive Inc. up US$1.62, or nearly 14 per cent, to US$13.53. The stock is still down 88 per cent over the last 12 months.
The Bank of Canada made a sizable cut to its key lending rate Wednesday from 4.25 per cent to 3.75 per cent as the global economy continues to expand. The half percentage point cut is the fourth rate cut in a row by the central bank as inflation dropped from 2.7 per cent in June to 1.6 per cent in September.
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The Bank of Montreal says it has restored access to its website after an outage Wednesday.
Gisele Pelicot, the 72-year-old victim of mass rape whose ordeal has shocked the world, told a trial in southern France on Wednesday that she was determined that making her case public should help other women and change society.
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In part two of a four-part investigation into the seedy underbelly of the lucrative clothing donation bin industry, CTV W5 uses trackers tp reveal a for-profit operation masquerading as a charity.
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Prime Minister Justin Trudeau's caucus is meeting this morning for its weekly gathering, this time with much higher stakes, as an evolving number of MPs is expected to confront the leader and ask him to step down.
The Bank of Canada made a sizable cut to its key lending rate Wednesday from 4.25 per cent to 3.75 per cent as the global economy continues to expand. The half percentage point cut is the fourth rate cut in a row by the central bank as inflation dropped from 2.7 per cent in June to 1.6 per cent in September.
A new report suggests that Canadians' exposure to a radioactive gas is increasing, putting millions of people at a higher risk of developing lung cancer.
A recall has been issued for certain clothing items sold at Giant Tiger stores over high levels of lead, according to a notice published by Health Canada Tuesday.
An oil salvage operation is underway on the fragile wreckage of a U.S. army transport ship that sank almost 80 years ago off coastal British Columbia in a race to head off an eruption of thousands of litres of oil that a coast guard official says is "near imminent."
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Donald Trump's longest-serving chief of staff is warning that the Republican presidential nominee meets the definition of a fascist and that while in office, Trump suggested that Nazi leader Adolf Hitler 'did some good things.'
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Ukraine will receive US$50 billion in loans, backed by frozen Russian assets, from Group of Seven allies, the White House said Wednesday. Distribution of the money will begin by year's end, according to American officials.
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Prime Minister Justin Trudeau's caucus is meeting this morning for its weekly gathering, this time with much higher stakes, as an evolving number of MPs is expected to confront the leader and ask him to step down.
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A recall has been issued for certain clothing items sold at Giant Tiger stores over high levels of lead, according to a notice published by Health Canada Tuesday.
A massive space rock, estimated to be the size of four Mount Everests, slammed into Earth more than 3 billion years ago 鈥 and the impact could have been unexpectedly beneficial for the earliest forms of life on our planet, according to new research.
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Scottie Barnes and the Toronto Raptors kick off the new NBA season tonight as they host the Cleveland Cavaliers.
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Ten things to do with friends or family this weekend.
The Bank of Canada made a sizable cut to its key lending rate Wednesday from 4.25 per cent to 3.75 per cent as the global economy continues to expand. The half percentage point cut is the fourth rate cut in a row by the central bank as inflation dropped from 2.7 per cent in June to 1.6 per cent in September.
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Montreal Mayor Valerie Plante will not be seeking reelection.
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Cool mornings and mild afternoons through the rest of this week in Edmonton and area.
The Bank of Canada made a sizable cut to its key lending rate Wednesday from 4.25 per cent to 3.75 per cent as the global economy continues to expand. The half percentage point cut is the fourth rate cut in a row by the central bank as inflation dropped from 2.7 per cent in June to 1.6 per cent in September.
The Nova Scotia government says it plans to reduce the province's harmonized sales tax (HST) rate by one percentage point next year.
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The Manitoba government is looking to add more liquor outlets inside food and grocery stores.
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It's being hailed as a sizable cut to the Bank of Canada's interest rate and the largest since the central bank began slashing in the summer.
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Dave Lindsey began growing giant pumpkins to bring a bit of magic to his grandkids' Halloween.
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The health of honeybees will be the focus of a presentation at the University of Lethbridge on Wednesday evening.
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Rallies by a group called Voices Against Violence took place across the country on Monday, including Sault Ste. Marie.
An Indigenous group in northwestern Ontario shut down the highway for a couple of hours Monday morning in protest after ancestral remains were found at a construction site.
Police in western Newfoundland say a 77-year-old man visiting the province from Kansas is missing after a fire at a hotel in Deer Lake, N.L.
At 2 p.m. on Thursday, the scene at the Lions Club in Clarenville, N.L., rivalled any rowdy St. John's bar that thumps with music late on a weekend night.
A Newfoundland scientist known for identifying a gelatinous, rancid mass that washed up on the island's shores decades ago is hoping to get his hands on a slice of the strange white globs appearing on the province's beaches.
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