Peloton is undergoing another round of layoffs — its fourth this year — with about 500 jobs being eliminated, as the troubled exercise company looks to cut costs to improve its bottom line.
The company said in a statement that a “key aspect of Peloton’s transformation journey is optimizing efficiencies and implementing cost savings to simplify our business and achieve break-even cash flow by the end of our fiscal year.”
However, Peloton said that Thursday’s cuts “marks the completion of the vast majority of our restructuring plan” it began in February 2022 after CEO Barry McCarthy assumed the position.
In an memo shared with CNN Business, McCarthy told employees that “this is a necessary step if we are going to save Peloton, and we are.” He added that its retail operations has lost more than $100 million last year. The company announced in August that it was closing a substantial amount of its 86 retail stores in North America.
“Together, we have dramatically restructured Peloton’s business. You should be incredibly proud of what we have accomplished. This has not been easy,” McCarthy wrote.
The layoffs amount to 12% of its staff, leaving the company with nearly 4,000 employees — that’s less than half the number of employees it had its peak in 2021. Cuts are companywide, however they are “heaviest in its marketing operation,” the Wall Street Journal first reported.
The company reported in August another dismal quarter, losing more than $1.2 billion and revenues sinking 30% compared to million the year prior.
McCarthy, a former tech executive, joined the company in February and has been tasked with a challenging turnaround.
He announced layoffs of 800 employees in early August to “become more efficient, cost effective, and agile.” Other changes outsourcing delivery — which is currently done by Peloton employees — and customer service to third parties.
Peloton in recent weeks has made efforts to expand its sales, including striking deals with Amazon (AMZN) and Dick’s (DKS). It’s also putting bikes in 5,400 Hilton Hotels across the United States as part of major deal with the chain.
Peloton shares rose more than 2% in premarket trading.
Update: This story has been updated with Peloton’s statement and details of the CEO’s memo to employees.