Peloton Prepares For Possible Job Cuts, Store Closures As Demand Outlook Worsens
The news for Peloton Interactive, Inc. continues to worsen this week as CNBC reveals the company (known for slapping an iPad on a stationary bike and charging thousands of dollars) is working with management consulting group McKinsey & Co. to analyze cost structure and potentially slash jobs.
CNBC obtained a recording of a recent call of Peloton’s management team discussing job cuts. There was an emphasis on reducing staff in its apparel division due to underperforming sales.
One Peloton executive was heard saying as many as 12% of all brick-and-mortar retail stores (about 12 out of 123 showrooms worldwide) are “on the cut line.”
There were also dozens of Slack messages CNBC reviewed of employees discussing upcoming job cuts and the company’s cratering stock price.
“Morale is at an all-time low,” one employee told CNBC. “The company is spinning out so fast.”
Peloton shares are down more than 3% to $30.28 in Tuesday morning trading. The stock has crashed more than 80% in the last 12 months, nearly back to IPO price.
Peloton, which sells at-home exercise equipment like bikes and treadmills, has cut its full-year outlook. The outlook worsened after so much demand was pulled forward due to people canceling their gym memberships during the pandemic and opting for at-home gyms.
This week, there was also word that persistent inflation and snarled supply chains have forced the company to tack on hundreds of dollars in fees for delivery and setup come Jan. 31.
So what could energize investors to pile back into Peloton shares? Possibly an announcement the company is entering the metaverse with VR cycling.
Tue, 01/18/2022 – 11:17