Peloton layoffs: Headcount reduced by 11%, engineering teams impacted in cost-cutting move
According to Bloomberg, citing a knowledgeable source, fitness technology company Peloton Interactive Inc. reduced its staff by 11%; The majority of layoffs came from engineering teams due to cost-cutting measures.
Peloton CEO Peter Stern, who will take office in 2025, told employees about the cuts on Jan. 30, according to the source. They added that the affected engineers were working on technology and efforts for enterprise clients.
The layoffs occurred due to low sales last year, particularly of Peloton’s new AI-powered bikes and treadmills. According to the report, the company’s quarterly results will be announced next week.
Peloton layoffs: What did the company say?
Responding to questions, a Peloton spokesperson told Bloomberg that the layoffs are part of a previously announced $100 million cost-cutting effort that includes “reshaping our teams and, in some cases, the places we work” to optimize savings.
“Today’s actions enhance our operational footprint and create efficiencies that enable us to continue investing in areas that support the transformation to growth. We are deeply grateful for the contributions of our departing colleagues and remain committed to supporting them throughout this transition,” the spokesperson added.
Peloton struggles with low sales: What’s the situation?
Peloton has suffered a long sales slump since pandemic lockdowns ended and people left their homes to continue exercising outdoors and in gyms.
Recent efforts to improve the company’s technology have failed to reignite growth. Last year’s upgraded equipment, introduced in October, included redesigned versions of the Bike, Bike, Tread and Tread, as well as the Row, which replaced the previous rowing machine. All of the new machines included Peloton IQ, an artificial intelligence platform that offers personalized guidance, insights and coaching plans.
Peloton also increased prices across its portfolio, increasing equipment costs by an average of 11% and subscription fees by approximately 19%. Analysts had expressed concern that the price increases would undermine Peloton’s goal of attracting new members, especially in an unstable economic environment.
Shortly thereafter, Peloton issued a voluntary recall of approximately 877,800 units of its previous high-end Bike model in the U.S. and Canada following reports that some seatposts broke, causing riders to fall. The incident was reminiscent of one in 2023 when Peloton recalled more than 2 million seats for its original Bike product.
The tech industry’s layoff spree continues
Peloton joins other tech companies that have recently cut their workforces.
Meta Platforms Inc. said it would start laying off more than 1,000 people this month, and Amazon.com Inc. It announced plans to eliminate 16,000 corporate roles.
ASML Holding NV said it would lay off about 1,700 people, and Autodesk Inc. announced plans to lay off approximately 1,000 workers.
Pinterest Inc., meanwhile, said this week it plans to cut “less than 15%” of its workforce.
(With input from Bloomberg)
