Peloton Cuts 11% of Jobs, With Engineering Teams Getting Hit

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(Bloomberg) — Peloton Interactive Inc., the long-struggling fitness technology company, slashed 11% of its workforce in a cost-cutting move, according to a person with knowledge of the matter.

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Peter Stern, who took over as chief executive officer last year, informed staffers of the move on Friday, said the person, who asked not to be identified because the matter isn’t public. The cutback mostly affects engineers working on technology and efforts for enterprise customers, the person said. 

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The cuts follow last year’s launch of new artificial intelligence-powered bikes and treadmills — hardware that got off to a sluggish sales start, Bloomberg reported earlier. New York-based Peloton is slated to report its quarterly results next week.

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The layoffs are part of a previously announced plan to save $100 million, a Peloton spokesperson said in a statement. The effort involves optimizing spending, “reshaping our teams and, in some cases, the locations where we work,” the spokesperson said. 

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“Today’s actions evolve our operational footprint and create efficiencies that enable us to continue investing in areas that support our return to growth,” the spokesperson added. “We are deeply grateful for the contributions of our departing colleagues and are committed to supporting them through this transition.”

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Peloton joins a slew of other tech companies that have recently slashed their workforces. Meta Platforms Inc. said this month that it would begin cutting more than 1,000 jobs, and Amazon.com Inc. announced plans to eliminate 16,000 corporate roles. ASML Holding NV said it would eliminate roughly 1,700 jobs, and Autodesk Inc. disclosed plans to shed around 1,000 workers. Pinterest Inc., meanwhile, said this week that it plans to cut “less than 15%” of its workforce.

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Peloton has been stuck in a long sales slump since pandemic lockdowns ended and people emerged from their homes to resume exercising outdoors and in gyms. 

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Recent efforts to improve the company’s technology haven’t reignited growth. Last year’s upgraded equipment, unveiled in October, included redesigned versions of the Bike, Bike+, Tread and Tread+, along with a Row+ that replaced the previous rowing machine. All of the new machines included Peloton IQ, an AI platform offering personalized guidance, insights and coaching plans.

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Peloton also raised prices across its portfolio, increasing equipment costs by an average of 11% and subscription fees by about 19%. Analysts expressed concern at the time that the price hikes would undermine Peloton’s ambitions to win over new members, especially in a shaky economic climate.

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Not long after, Peloton issued a voluntary recall on about 877,800 units of its previous high-end Bike+ model in the US and Canada following reports that some seat posts broke, causing riders to fall off. The incident was reminiscent of an episode in 2023, when Peloton recalled more than 2 million seats for its original Bike product.

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(Updates with other companies’ layoffs in sixth paragraph.)

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