By the Numbers: Peloton laying off 2,800 employees as demand plunges
The media and exercise equipment company Peloton has announced that they are laying off 2800 employees in a recent press release, citing a restructuring plan as the reason. The statement and report released on Tuesday state the company is planning to implement strict corporate downsizing as part of the restructuring plan, which is aimed to bring down the operating expenses for the corporation.
The press release states, “The workforce reduction will occur across nearly all business operations to streamline reporting structures and create clearer lines of accountability. This will result in the reduction of approximately 2,800 global positions. Corporate positions will be reduced by approximately 20%. With regard to operations in the field, the company is reducing its owned and operated warehouses and delivery teams and expanding its commercial agreements with third party logistics providers.”
The press release states the company will save $800 million in costs annually after the firings, contributing to 20% of the total global Peloton employees. The company is trying to make up for the loss incurred due to demands of their home exercising equipment falling after the lockdown restrictions have eased.
The co-founder and newly appointed Executive Chair of the company, John Foley said in a statement, “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. 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.”
An extra sentence added in the press included what everyone was wondering, none of the layoffs will be from the group of instructors at Peloton, some of which earn more than $500,000 per year. “Peloton’s roster of instructors and breadth and depth of its content will not be impacted by the initiatives announced today,” said the press release.
Meanwhile, the employees being laid off are being offered “meaningful cash severance allotment” and a one-year free Peloton subscription. But this might mean nothing for an employee living paycheck to paycheck, needing a steady income every week or month to survive.
Regarding those being laid off, Foley said, “These decisions, particularly those related to our impacted Peloton team members, were not taken lightly. We greatly value the contributions of our talented colleagues and are committed to supporting impacted team members in their transitions. We thank our global team members for their focus and dedication through this process.”