Peloton will embark on a sweeping overhaul that includes cutting nearly 800 jobs, raising prices and outsourcing functions such as equipment deliveries and customer service to outside companies.
Peloton Interactive Inc. will embark on a sweeping overhaul that includes cutting nearly 800 jobs, raising prices for its Bike+ and Tread machines, and outsourcing functions such as equipment deliveries and customer service to outside companies.
“We have to make our revenues stop shrinking and start growing again,” McCarthy said in the memo provided to Bloomberg, adding that the changes are essential to making Peloton cash-flow positive again. “Cash is oxygen. Oxygen is life.” “This has been a challenge,” McCarthy told staff. “We won’t fix it overnight, but we have no choice but to make it work, so we’re leaning into it and proactively managing our 3PL relationships. We are confident in the plan we’ve put in place and we’re encouraged by the progress we’re making.”
The company is raising the price of its flagship Bike+ by US$500 to US$2,495 and its Tread treadmill by US$800 to US$3,495. The increases are a reversal as the Bike+ was priced at US$2,495 prior to cuts in April. The new Tread price is higher than it was four months ago. The price cuts “cheapened at least the perception of the brand,” he said. “So this is a return to historical positioning.”
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