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Peloton will issue another round of job cuts, laying off about 500 people, or approximately 12% of its workforce, as the fitness giant continues to work to turn its struggling business around.
"Decisions like this are incredibly difficult and Peloton is doing all we can to help our impacted colleagues," a Peloton spokesperson told FOX Business. "As we pivot to growth, today marks the completion of the vast majority of our restructuring plan we began in February 2022."
Peloton CEO Barry McCarthy told The Wall Street Journal that while the cuts are company-wide, its marketing department would be hit the hardest. The Journal first reported the story.
The latest layoffs, which leave the company with a total of roughly 3,800 employees globally, will help Peloton reach break-even cash flow by the end of fiscal year 2023. In 2021, the company grew to more than 8,600 employees as it worked to meet the uptick in consumer demand spurred by the COVID-19 pandemic.
PELOTON BIKE COMING TO ALL HILTON-BRANDED HOTELS IN US BY END OF 2022
In February, Peloton laid off 2,800 employees globally and announced it would embark on an $800 million restructuring program.
Following the announcement, another 784 employees were laid off in August. Peloton also said at the time that it would raise prices on its Bike and Tread+ products, significantly reduce its North American retail footprint and eliminate its final mile distribution network.
Additionally, the company has secured $750 million in financing, maintained a liquid cash balance of more than $1 million, outsourced its Peloton Bike and Tread production in Taiwan, expanded its product portfolio with a $3,195 rowing machine and forged partnerships with Hilton, Dick's Sporting Goods and Amazon.
|HLT||HILTON WORLDWIDE HOLDINGS INC.||124.81||-1.12||-0.89%|
|DKS||DICK’S SPORTING GOODS INC.||111.42||-0.16||-0.14%|
Peloton reported a loss of $1.24 billion, or $3.68 per share, in its fourth quarter compared with a loss of $313.2 million, or $1.05 a share, a year earlier. It also disclosed a total of 6.9 million members, a decrease of about 143,000 people from the prior quarter.
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McCarthy, who took over the chief executive officer role in February, expects to have a better sense of the success of its growth strategy relative to the moves its deployed to date in the next six months.
"There comes a point in time when we’ve either been successful or we have not," McCarthy told the Journal.
"If we don’t grow… we need to grow to get the business to a sustainable level," he added.
|PTON||PELOTON INTERACTIVE INC.||8.46||-0.03||-0.29%|
Peloton shares have fallen approximately 75% year to date.
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