Aug 12 (Portal) – Peloton Interactive Inc (PTON.O) said on Friday it was cutting jobs, closing stores and raising the prices of its exercise equipment, including treadmills and top-end bikes, as it launched a company-wide Undertakes overhaul to support its sales and improve cash flow.
Shares of the company rose about 11% in afternoon trade after the company announced in a memo that it would cut about 800 jobs and reduce its retail footprint in North America.
Under Chief Executive Officer Barry McCarthy, Peloton implemented a series of measures, including cost-cutting, to stabilize its business as pandemic-driven demand for its treadmills and exercise bikes quickly petered out.
On Friday, the company unveiled a plan to aggressively reduce its retail presence in the United States and eliminate a number of warehouse and customer service team jobs.
Shifting last-mile delivery to third-party logistics providers will reduce delivery costs per product by up to 50%, McCarthy said in the memo seen by Portal.
The company is also raising prices on its Bike+ and Tread machines in five markets, including the United States and Canada. (https://bit.ly/3peZhNv)
The company, which cut prices on its products earlier this year, said it will now raise prices by $500 to $2,495 for Bike+ and $800 to $3,495 for Tread in the US.
McCarthy, a former Netflix Inc (NFLX.O) executive, said he’s aiming to bolster Peloton’s software engineering team, calling it “right investments” to drive growth.
($1 = 1.2782 Canadian Dollars)
Reporting by Nathan Gomes and Kannaki Deka in Bengaluru; Additional reporting by Deborah Sophia; Edited by Krishna Chandra Eluri and Anil D’Silva
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