Peloton plans job cuts but denies pausing production

Peloton confirmed it was considering job cuts as its chief executive denied the company was halting production of its pricey bikes and treadmills.

The former pandemic darling said it will review the structure and size of its workforce and “right-size” the production of its internet-connected products following a report on Thursday that said it was planning a temporarily production pause.

John Foley, chief executive and co-founder, told employees “rumors that we are halting all production of bikes and treads are false” and it identified a “leaker” and “it was moving forward with the appropriate legal action”.

He said the information was “incomplete, out of context, and not reflective of Peloton’s strategy”.

The CNBC report sent shares down as much as 27pc before regaining some ground, wiping off nearly $2.5bn (£1.8bn) in market value. They rose 8pc in pre-market trading in New York on Friday.

Mr Foley added: “In the past, we’ve said layoffs would be the absolute last lever we would ever hope to pull. However, we now need to evaluate our organisation structure and size of our team.”

Separate reports earlier this week said Peloton had brought in consultants from McKinsey to advise on job cuts.

In the early days of the pandemic Peloton had to grapple with a jump in demand for its products as locked-down consumers wanted to exercise at home.

However, more recently appetite for fitness has dwindled as people gradually resume their pre-pandemic habits.

The company previously admitted that it had underestimated the impact of economies reopening after stringent pandemic restrictions worldwide.

Peloton also published preliminary results for the three months to Dec 31. It expects sales of $1.1bn, slightly lower than previous guidance, and an underlying loss of up to $270m compared with forecasts of up to $325m.

The company cautioned that it had not yet completed its reporting process and the final results will be published on Feb 8.

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