Dive Brief:
- Peloton is launching a cost restructuring plan that will involve reducing its global workforce, the fitness company said Thursday.
- The effort is intended to achieve at least $100 million of run-rate savings by the end of fiscal year 2026 by reducing headcount, paring back indirect spending and relocating some work, Peloton said in a letter to shareholders. The layoff will involve 6% of the workforce, according to the company.
- “This is not a decision we came to lightly, as it impacts many talented team members, but we believe it is necessary for the long-term health of our business,” the letter said.
Dive Insight:
Peloton is trimming its workforce again as it looks to cut costs. The exercise company said it needs to cut payroll because operating expenses “remain too high, which hinders our ability to invest in our future.”
Cost savings are expected to fuel growth and innovation priorities outlined by CEO Peter Stern, including expanding beyond cardio into strength and other areas, according to the company.
The announcement of the cost restructuring plan came as the company reported fourth-quarter earnings. Total revenue fell 6% year over year to $606.9 million, while its member base also shrank, about 6%, to 6 million. Peloton swung to a profit, posting a net income of $21.6 million, compared with a loss of $30.5 million in the year-earlier period. The company’s Q4 operating expenses were $298.5 million, a 20% decrease year over year.
Meanwhile, the company’s net debt in fiscal 2025 declined 43% compared with the prior year.
Peloton announced last year that its then-CEO Barry McCarthy was stepping down after about two years in the role as the company tried to rebound from financial challenges. The company also announced at the time that it was planning to slash its global workforce by about 15%.
U.S.-based employers announced 806,383 job cuts from January through last month, the highest level year-to-date since 2020 when 1,847,696 were reported, according outplacement firm Challenger, Gray & Christmas.
