Peloton is cutting another 500 jobs in a move that CEO Barry McCarthy said should position the struggling fitness equipment maker to return to growth.
The cuts, which amount to about 12% of Peloton’s workforce, mark a pivot point for the company, McCarthy told CNBC Thursday. Peloton already had multiple rounds of layoffs this year.
“The restructuring is done with today’s announcement,” McCarthy said. “Now we’re focused on growth.”
McCarthy said the company now has to prove its recent spate of strategy changes, including equipment rentals and partnerships with Amazon and Hilton, can help the company grow.
Shares of Peloton seesawed in premarket trading. The stock is down about 76% so far this year.
McCarthy has overseen drastic changes to Peloton’s business model this year as the company struggled with sales after a boom during the earlier days of the Covid pandemic. A former Spotify and Netflix executive, he has pushed the company’s business further into subscriptions while broadening the availability of its products beyond Peloton’s direct-to-consumer roots.
Earlier this week, the company said it would put its bikes in every Hilton-branded hotel in the United States. It recently announced partnerships to sell equipment in Dick’s Sporting Goods stores and on Amazon.
McCarthy talked to CNBC after The Wall Street Journal reported on remarks he made about where the company could stand in six months.
“If we don’t grow,” McCarthy, who took over as CEO earlier this year from co-founder John Foley, told the Journal, “We need to grow to get the business to a sustainable level.” The Journal also first reported on the layoffs.
Beyond that point, though, the company, which has slowed the rate of its cash burn, is “extremely well capitalized” and “highly liquid,” McCarthy said in an interview with CNBC. And it’s still on track to meet its cash flow goals for the fiscal year.
“I’m feeling about as optimistic as I’ve ever felt,” he said, reflecting on the changes the company made over the past several months.