Peloton to cut thousands of jobs as it replaces its CEO

Photo (c) Sundry Photography - Getty Images

The company feels good about its chances of turning things around

Less than a month after Peloton paused production in order to reset priorities and processes, CEO John Foley has decided to step down from his position. At the same time, the company announced that it is planning to cut thousands of employees off its payroll.

The company stated that it's implementing a "comprehensive program" that will cut costs and return it to profitability, with officials saying the decision should save at least $800 million a year. Some of those savings will come through a reduction of the number of warehouses the company owns as it expands its use of third-party delivery providers.

As far as the job cuts are concerned, the reduction will take place across the company’s entire landscape. This will result in the reduction of approximately 2,800 global positions, including a 20% cutback in corporate positions alone. Layoffs will begin on Feb. 15, and employees who lose their jobs will receive a one-year digital subscription to Peloton as part of their severance package.

"Peloton is at an important juncture, and we are taking decisive steps. Our focus is on building on the already amazing Peloton Member experience while optimizing our organization to deliver profitable growth," said John Foley, the company's co-founder and newly appointed executive chair.

"With today's announcements, we are taking action to ensure Peloton capitalizes on the large, long-term Connected Fitness opportunity. This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline."

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