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Diving Brief:

  • As part of a turnaround strategy, Peloton will cut its workforce by about 12%, or about 500 jobs, according to a company spokesperson.
  • CEO Barry McCarthy said the company lost “over $100 million on retail last year”, which is why the company is restructuring in order to achieve balanced cash flow by the end of the year. end of the fiscal year, according to an internal note to Platoon employees shared with Retail Dive.
  • The news follows an agreement with the United States Hilton Hotels to put a Peloton bike in every fitness center that was announced on Monday. The brand said 90% of its members said they were more likely to stay at a hotel that used its cycling gear.

Overview of the dive:

Peloton continues its journey of restructuring the company following the a rough series earnings this year.

The The Wall Street Journal reported that McCarthy gives the company about six months to recover and is probably not viable as a stand-alone business if that fails. A Platoon The spokesperson told Retail Dive that McCarthy had not commented and was optimistic about the future of the business.

“Twice in my career, I found myself in a similar situation. The first time was brutally difficult. The second time, I had learned from the first. Resilience is a conscious choice. Sooner or later, we all get knocked down in life,” McCarthy said in his memo to employees about the job cuts. “But we all deal with setbacks in our own way. However you face it, never lose your confidence and never stop picking yourself up when you get knocked down.

It’s also not the first – or second – time that Peloton has cut jobs this year. The licensed home fitness brand employees in February and apparently in August.

The news comes after a month of various announcements and Peloton leadership changes. In September, the brand entered a big business with Dick’s sporting goods. Additionally, Peloton’s chief marketing officer, chief commercial officer, and brand co-founders have all recently left the company.

The layoffs alone are unlikely to turn the struggling company around, according to GlobalData chief executive Neil Saunders.

The problem for Peloton is a time problem,” Saunders said in emailed comments. “While many of the steps taken make sense, the company’s problems run extremely deep and it remains debatable whether there is enough lead for them to change things.”