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Shares of the company surged about 11% in afternoon trade after
the company said in a memo it would cut about 800 jobs and
reduce its retail presence in North America.
Under Chief Executive Officer Barry McCarthy, Peloton has
implemented a slew of measures including cost cuts to steady its
business as a pandemic-driven demand for its treadmills and
exercise bikes quickly fizzles.
On Friday, the company outlined a plan to aggressively reduce
its retail presence in the United States and eliminate a number
of jobs in warehouses and customer support teams.
Shifting final mile delivery to third-party logistics providers
will reduce per-product delivery costs by up to 50%, McCarthy
said in the memo seen by Reuters.
The company is also raising prices of its Bike+ and Tread
machines in five markets, including the United States and
Canada. (https://bit.ly/3peZhNv)
The company, which lowered the prices for its products earlier
this year, said it would now raise prices by $500 to $2,495 on
Bike+ and by $800 to $3,495 on Tread in the United States.
McCarthy, a former Netflix Inc executive, said he was aiming to
boost Peloton's software engineering team, terming it as "right
investments" to drive growth.
($1 = 1.2782 Canadian dollars)
(Reporting by Nathan Gomes and Kannaki Deka in Bengaluru;
Additional reporting by Deborah Sophia; Editing by Krishna
Chandra Eluri and Anil D'Silva)
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