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Peloton Interactive (NASDAQ:PTON) shares are up 1.9% in pre-open Thursday after the WSJ reported the company is slashing about 500 jobs in the fourth round of layoffs.
Peloton is fighting to survive and the cuts are necessary if the company wants to continue as a stand-alone business, Chief Executive Barry McCarthy told staff today. Most cuts will take place in the marketing department, which McCarthy believes is too big for a company of Peloton’s size.
“There comes a point in time when we’ve either been successful or we have not,” Mr. McCarthy said in an interview with the WSJ.
“If we don’t grow, we need to grow to get the business to a sustainable level.”
The fourth round of cuts will leave Peloton with about 3,800 employees, less than half of the 8,600 staff they employed in 2021. The WSJ report also notes that Peloton eliminated 600 more jobs since June than it previously disclosed.
“I know many of you will feel angry, frustrated, and emotionally drained by today’s news, but please know this is a necessary step if we are going to save Peloton, and we are,” Mr. McCarthy said in an internal memo to employees.
The report also noted that Peloton is considering selling its Precor commercial fitness equipment unit, less than two years after paying $420 million to acquire it.
McCarthy remains optimistic Peloton will make it.
“I can see in the numbers the business starting to change course. Which is part of what gives me confidence when I say that I think this is the last step in the process.”
Peloton stock price is down 95% from its 2021 peak.
