Peloton’s COVID-19 Boost Fades: Job Cuts and Financial Struggles

Peloton, an American fitness equipment manufacturer, experienced a sharp increase in demand during the pandemic due to the closure of gyms. However, as restrictions were lifted, sales declined and the company found itself facing financial difficulties. As a result, branches are being closed and 400 employees representing 15% of the workforce are being laid off. CEO Barry McCarthy is leaving the company and two Board Members Karen Boone and Chris Bruzzo are serving as interim bosses until a new CEO is found.

In the early stages of the pandemic, Peloton saw a surge in sales of training bikes and treadmills as people turned to home workouts. However, with the easing of restrictions, interest in Peloton’s devices declined. The company had planned to build a factory in the USA but ultimately canceled those plans and outsourced production to a contract manufacturer. This led to multiple rounds of job cuts throughout 2021, reducing Peloton’s workforce to around 3,000 employees.

Despite this setback, Peloton remains committed to finding sustainable growth opportunities in the post-pandemic era. The company recorded a four percent decrease in sales totaling just under $718 million and recorded a loss of $167.3 million in the previous year. In an effort to adjust costs, Peloton has been taking steps such as further job cuts and potential refinancing strategies with banks. At its peak, Peloton was valued at over $50 billion on the stock market but its shares have since plummeted with each now worth less than $3.