Peloton CEO lays off another 500 employees and expects songs of praise

Peloton has announced the layoff of 500 more employees. The fitness company is thus already introducing the fourth round of layoffs this year. Meanwhile, CEO Barry McCarthy can’t understand why the press isn’t singing the praises.

The rosy times at Peloton seem to be finally over. After the fitness equipment manufacturer experienced a real upswing at the beginning of the corona pandemic, things have been going downhill for months.

Because with the leveling off of the pandemic, the demand for fitness equipment for your own four walls also fell. Operating costs at Peloton then exploded as the company previously hired massive staff.

However, CEO Barry McCarthy has now announced the fourth round of layoffs this year. However, according to reports and internal memos, he doesn’t seem to understand why people aren’t hailing the restructuring.

The layoffs at Peloton

Peloton announced the layoff of around 2,800 employees back in February 2022. Former CEO John Foley also resigned at the time. McCarthy, who previously held senior positions at Spotify and Neflix, took his place. What followed were more layoffs: 500 in June and 800 in August.

Apparently that was still not enough for the restructuring of the company. Because how The Wall Street Journal (WSJ) reports, McCarthy has now announced that 500 more employees will be laid off. The bottom line is that up to 4,600 employees will have to leave Peloton this year.

A total of 4,600 employees have to go

That’s a matrimonial drop from last year’s peak of 8,600 employees, but not far off the roughly 3,700 people Peloton employed before the pandemic.

In a memo obtained by the WSJ and in an interview with the daily, Barry McCarthy also indicated that the company could survive for only six months unless a turnaround occurs.

Peloton CEO expects praise for restructuring

However, after the WSJ reported on the case, the Peloton CEO retracted his claims in a second memo. Meanwhile, he accused the newspaper of giving the wrong impression. In a memo that The Verge available, McCarthy writes:

We expected a story about Peloton’s redemption and successful turnaround, so we spent a lot of time providing background on the status of our turnaround. The headline should have been that recent strong execution and today’s reorganization have positioned us to meet our fiscal year-end cash flow break-even target, with a renewed focus on accelerating our growth, which is why I’ve never been more optimistic for felt our future.

McCarthy accuses the WSJ of giving the wrong impression

However, according to the Peloton CEO, the WSJ’s article gives the impression “that we only have six months to live, which contradicts the story we are telling and the state of the company.” Meanwhile, he apologized to his employees and said that there was no ticking clock for the company.

Meanwhile, McCarthy argued in an interview with the WSJ, “”I’ve been asked, ‘How much time do you think you have to show success?'”. His response was, “Twelve months from the time I joined Peloton, knowing that we are already making significant progress and in record time.” The latter he would have taken for granted.

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