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Investing.com – Peloton stock (NASDAQ:PTON) was recouping some of its Thursday losses after committing to lower operating expenses and improving profitability.
The stock was up 8% in Friday’s premarket after tumbling 24% in previous session on reports it might halt all production of bikes and Treads for two months due to lack of demand. CEO John Foley disputed those reports.
However, according to a Bloomberg report, the company isn’t ruling out job cuts as part of its efforts to improve profitability.
“In the past, we’ve said layoffs would be the absolute last lever we would ever hope to pull,” he said. “However, we now need to evaluate our organization structure and size of our team, with the utmost care and compassion. And we are still in the process of considering all options as part of our efforts to make our business more flexible,” Foley wrote in a memo to staff, according to Bloomberg.
The company said it would move to a more variable cost structure to improve profitability.
Peloton estimated second-quarter revenue at about $1.14 billion, compared with its forecast of $1.1 billion-$1.2 billion. The final numbers will be out on February 8.
The company’s focus on costs comes as it confronts the realities of the post-pandemic world. It was among the biggest winners of the pandemic when stuck-at-home people used its bike and treadmills as alternatives to gyms that were closed by lockdowns. With the pandemic fading and curbs on movement of people easing, people are going back to gyms and walks and runs in the parks.
The company has attempted to grow its audience by cutting prices but is still to show any concrete signs of progress there.
