Peloton offers free one-year membership in severance program to 2,800 employees as part of large-scale cost-cutting measures
Peloton is currently in crisis, with its share price plummeting, CEO John Foley resigning and 2,800 employees – about 20% of its workforce – being laid off.
To soften the blow to terminated staff members, Peloton is offering one year of free membership to its classes as part of the severance package, although they will need to own a Peloton product themselves to access the offer.
As the company sought to cut costs, it also canceled plans to build a new factory in Ohio, United States, originally designed to reduce its dependence on foreign suppliers.
John Foley, former CEO of Peloton, said before his resignation: “These decisions, particularly those related to our affected Peloton team members, have not been taken lightly.
“We greatly appreciate the contributions of our talented colleagues and are committed to supporting affected team members in their transitions. We thank our global team members for their focus and dedication throughout this process. »
Former Spotify chief financial officer Barry McCarthy will now succeed John Foley as CEO as Peloton faces major restructuring to try to stem the slide.
At the height of the pandemic, Peloton enjoyed substantial success, with its peak valuation hitting $50 billion. Since then, the indoor fitness brand has suffered significant losses and a significant decline from its once lofty highs.
The company recorded a net loss of $439.4 million for the three-month period ending December 31, while in the same month it announced plans to temporarily halt production of its machines.
However, Peloton is no longer sure of its direction and is the subject of a potential bidding war between some of the world’s biggest companies, including Amazon, Nike and Apple. The latest revelations saw Peloton’s market value drop to less than $8 billion this week.
The company said, “If a bidding process begins, we view Apple as the likely acquirer due to the clear strategic fit with its health/fitness/subscription initiatives, while Amazon and Nike, among others, could be potential bidders in the mix.
“The reality is that Foley was the pilot of the growth plane Peloton and his departure paints a bleak picture with the main visionary no longer in command.”