Peloton is cutting jobs, closing stores and raising prices in a company-wide restructuring

Aug 12 (Reuters) – Peloton Interactive Inc (PTON.O) On Friday, it said it would cut jobs, close stores, raise prices on fitness equipment including treadmills and top-end bikes, and undertake a company-wide restructuring to boost its revenue and improve cash flow.

Shares of the company rose about 11% in afternoon trading after the company said in a note that it would cut 800 jobs and reduce its retail presence in North America.

Under CEO Barry McCarthy, Peloton has implemented a number of measures, including cost cuts, to shore up its business as demand for its treadmills and exercise bikes is spurred by a pandemic.

Sign up now for unlimited free access to Reuters.com

On Friday, the company outlined plans to drastically scale back its retail operations in the United States and eliminate many jobs in warehouses and customer support teams.

Shifting final-mile delivery to third-party logistics providers could cut per-product delivery costs by up to 50%, McCarthy said in a memo seen by Reuters.

The company is raising the prices of its Bike+ and Tread machines in five markets, including the US and Canada. (https://bit.ly/3peZhNv)

The company, which cut prices on its products earlier this year, now says it will raise prices on the Bike+ by $500 to $2,495 and the Tread by $800 to $3,495 in the US.

McCarthy, a former Netflix Inc (NFLX.O) The executive said he aims to bolster Peloton’s software engineering team, citing the “right investments” to fuel growth.

($1 = 1.2782 Canadian dollars)

Reporting by Nathan Gomez and Kannagi Deka in Bangalore; Additional reporting by Deborah Sophia; Editing by Krishna Chandra Eluri and Anil de Silva

Our Standards: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published.