Peloton has been on the decline this year and in a new attempt to cut costs, CEO Barry McCarthy laid off an additional 500 workers. The stationary bike line lost another 12% of its workforce as a result of the most recent layoffs, which has already happened several times this year.
“The restructuring is done [now],” McCarthy said after the latest round of layoffs. “Now we’re focused on growth.”
After the layoffs, Peloton shares closed at a 4% increase on Thursday. Overall, the stock is down 75% for the year. It will take more than layoffs for the company to fully recover at this point, and some speculate the company is looking for a buyer.
McCarthy stated in tandem with the layoffs on Thursday saying, “Restructuring a business requires difficult decisions that affect people’s lives. I’m grateful for the many contributions of those who have been impacted [by the layoffs].”
McCarthy feels Peloton’s partnerships with brands such as Amazon and Hilton will allow it to recover. He took over as CEO earlier in the year when John Foley exited. Peloton originally saw a boom of sales during the lockdowns in COVID thanks to people being forced to work out from home. Since then, the company has struggled to keep up the momentum.
McCarthy previously worked at tech companies such as Netflix and Spotify and believes the subscription approach and business model of those companies could also benefit Peloton.
“We need to grow to get the business to a sustainable level,” McCarthy commented. “I’m feeling about as optimistic as I’ve ever felt,” he said of the company still being highly liquid and on track to meet its cash flow goals for the fiscal year.
He feels the company is “extremely well capitalized” and with the new layoffs and further restructuring plans, the ability to bounce back is possible.
