“Employees are losing their jobs and livelihoods while Peloton continues investing in high-profile artist series and segments. “The layoffs for Peloton may help alleviate the financial standing of the brand, but these actions tell a different story for what the company values,” says Dr Karen Freberg, a professor of strategic communications at the University of Louisville. Others, however, are quicker to call out what they see as hypocrisy. but it may ensure the company’s survival.” Laying off 500 people is never an easy thing to do. “It’s clear that is doing everything he can to turn around the company. The layoffs may provide some much-needed financial relief, says Dini von Mueffling, who runs an independent PR firm in New York and helps brands navigate publicity crises. The fitness company has solidified major deals with Dick’s and Amazon, and announced earlier this week that its equipment will soon be available in Hilton Hotels across the US.
The decision to cut jobs adds to other recent efforts to bolster sales. “A key aspect of Peloton’s transformation journey is optimizing efficiencies and implementing cost savings to simplify our business and achieve break-even cash flow by the end of our fiscal year,” a company spokesperson said in a statement shared with The Drum today.
Now, as Peloton axes employees, it looks to recoup losses and strengthen its bottom line. The company announced a quarterly loss of about $1.24bn in its latest earnings call. Plus, as consumers flocked back to gyms following the height of the Covid-19 pandemic, demand for at-home exercise solutions plummeted.
Following a series of scandals ranging from treadmill recalls in light of a child’s death to highly-publicized leadership failures and the withdrawal of an ad starring Chris Noth following sexual assault allegations against the actor, the company suffered sales declines, major cash losses and inventory pile-up. When ex-Spotify and Netflix exec Barry McCarthy took the helm following the departure of co-founder John Foley in February, the company kicked off a major restructuring that saw 2,800 employees lose their jobs. In fact, it’s the fourth round of layoffs the company has undergone this year.
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