Peloton is reportedly planning to cut 41% of its sales and marketing staff, according to a report first released by Business Insider. Peloton has even supposedly given its pet project a name: Project Fuel.
According to Protocol, Peloton will let go of employees working in 15 retail stores and on the company’s e-commerce biz. The company will reportedly cut “low performers” from its recent talent review. With that being said, Peloton is also hiring a consulting firm to review its cost structure.
These layoffs are a decisive turnaround for the embattled at-home fitness company, which grew tremendously during the pandemic. 🚲 Peloton hired more than 3,000 employees in the thick of the pandemic, which spoke to unprecedented growth. Peloton now refers to that growth as “undisciplined.”
“Undisciplined growth” is one of the leading reasons why the company decided to implement a hiring freeze in November, which also came with a reduction in outlook. Peloton cut its FY 2022 outlook by nearly a billion dollars — now Peloton says that it doesn’t expect to be EBITDA profitable until FY 2023. 😬
Leading up to the stock price’s cratering last year, insiders sold more than $500 milion in Peloton stock. Some users on Stocktwits and on Twitter did not shy away from scrutinizing leadership for jumping ship with riches, leaving hundreds of employees in the dust with lost livelihoods.
Ultimately, layoffs = cost cutting = more profits. That’s why the news of the layoffs excited investors today, sending shares of $PTON rising by 5.3%. Although investors are jazzed, Peloton’s employees indicate that the company’s morale is extremely low — that’s a far cry from where morale supposedly was this time last year.
$PTON is down 80% in the past year. As of today, it’s valued at $10.4 billion.