New Delhi: After tech giants like Alphabet-owned Google, Microsoft, Wipro, Infosys and Facebook-parent Meta Platforms, yet another company has announced to cut off its workforce. In a desperate move to cut costs, many big companies have laid off hundreds of employees, and US exercise and fitness equipment company Peloton has joined the band too. As per reports, these layoffs would be Peloton’s fourth round of cuts this year, as post- pandemic sales of its indoor exercise equipment continues to tail off.Also Read – Microsoft Lays Off 1,000 Employees This Week Across Several Divisions. Here’s Why
Speaking to The Wall Street Journal, Peloton’s CEO Barry McCarthy said that the company plans to cut about 500 jobs, roughly 12% of its remaining workforce, a move that is necessary to save the connected-fitness-equipment maker. Also Read – IT Jobs: Infosys, Wipro, TCS And HCL Hire Over 105,000 Freshers In First Half Of This Year
The layoffs that were announced to the staff last week will leave Peloton with roughly 3,800 employees globally, less than half the number of people the company employed at its peak last year. Since June, Peloton has eliminated about 600 more jobs through retail store closings, attrition and other moves. Also Read – Google Ki Diwali: Light Up! Tech Giant Has Unique Diwali Surprise For Its Users!
Peloton Interactive Inc. said it’s completed the vast majority of a restructuring plan begun in February. That plan included a new chief executive and a smaller store base.
“The changes we have made, combined with the performance of the business, are moving us closer to our fiscal year-end goal of break-even cash flow, with a renewed focus on growth,” said CEO McCarthy.
PELOTON CEO WANTS PEOPLE TO BE HAPPY ABOUT THE LAYOFFS
Announcing the latest lay-off round, CEO McCarthy said that he does not understand why people are not happy with his decision. He said that he was apparently surprised to learn that media reports “accentuated the negative” from his lay-off announcement.
The Verge reported, citing an internal memo the CEO issued, that accused the Wall Street Journal of creating the wrong impression instead of praising the company. “We were expecting a story about redemption and the successful turnaround of Peloton, which is why we invested time on background briefing them on the state of our turnaround,” he wrote.
In a message to the company’s employees after the Wall Street Journal article was published, CEO McCarthy said he didn’t mean to give the impression that the company has six months to live. “There is no ticking clock on our performance and even if there was, the business is performing well and making steady progress toward our year-end goal of break-even cash flow,” he wrote.
“The headline should have been that recent strong execution and today’s restructuring have positioned us to meet our fiscal year-end goal of break-even cash flow, with a renewed focus on accelerating our growth,” McCarthy said.
Instead, “the article creates the impression we have six months to live, which is at odds with the story we told and the state of the business. That’s on me and I apologise,” he mentioned.
McCarthy, who took over in February, said he is giving the unprofitable company about another six months to significantly turn itself around and, if that fails, Peloton likely isn’t viable as a stand-alone company.
McCarthy said that “I don’t want this news cycle to overshadow the difficult reality that 500 of our colleagues have been impacted today, or the gratitude I have for all they and you have done for the company”.
Peloton in August laid off roughly 780 employees, shut down several stores and hiked prices on bikes and treadmills. The company was rumoured to be acquired by Amazon earlier this year. Peloton has a community of nearly 7 million members. The company, also increased the price of the Peloton Bike+ by $500 to $2,495 and Tread by $800 to $3,495 in the US.