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:
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.
The Department of Government Efficiency remains the leading reason for job cut announcements in 2025, cited in 289,679 planned layoffs so far this year, Challenger said in a report last month. Market and economic conditions have been the second-most cited reason for workforce reductions. Other drivers include bankruptcies, technological updates, cost-cutting and financial losses.
Peloton 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 just cardio fitness, with strength and additional wellness offerings,” according to the company.
The company posted net income of $21.6 million for its fiscal fourth quarter ended June 30, 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%.
