Peloton, a maker of exercise bikes and live workouts that has skyrocketed in demand as gyms closed during the pandemic, is considering laying off some workers and making changes to its operations as once-hot interest in its products slows.
“Now we need to evaluate our organizational structure and the size of our team with the utmost care and compassion,” wrote John Foley, co-founder and chief executive of Peloton, in a post on the company’s website late Thursday evening. “And we’re still looking at all options to make our business more agile.”
Foley dismissed reports that the company would temporarily halt production of its motorcycle. The news, reported by CNBC citing internal documents, caused the company’s share price to drop 24 percent on Thursday. CNBC reported that Peloton plans to suspend production of its connected fitness products from February to March.
“The information received by the media is incomplete, out of context and does not reflect Peloton’s strategy,” Mr. Foley wrote, without providing further details.
He said Peloton will announce more details on the cuts when it releases its quarterly earnings report on Feb. 8. The company separately released preliminary results for the three months ended December, showing it expects to report losses of between $260 million and $270 million. million, out of revenue of about $1.14 billion.
Peloton became the must-have exercise solution for people who could afford it when the pandemic led to the closure of gyms and an increase in people who started working from home. Owners of his bikes and treadmills have access to instructor-led workouts, and some of his trainers have loyal fans even outside of the workout app.
Peloton bikes start at $1,495, while the latest Peloton Bike+ is $2,495.
But over the past year, the fate of the company has changed dramatically. Early last year, the company faced complaints about shipping delays and hours of waiting for customer service representatives. In May, Peloton had to recall its Tread+ and Tread treadmills after reports of several related injuries and one child death.
More recently, as more countries began lifting lockdown restrictions and businesses began to reopen and people became less inclined to exercise at home, demand for Peloton equipment has plummeted. And it faces increasing competition, including from less expensive bikes that people can use with the software in the Peloton app.
The company also had to deal with an unflattering cameo in the HBO series And Likewise, which debuted in December, where the character died after getting off his Peloton bike.
Due to problems, the company’s shares fell by 76 percent in 2021.