Peloton Is Imploding, and Leadership Wants Workers To Take the Fall for Them

After cashing out hundreds of millions of dollars in stock, Peloton executives plan to cut staff and close stores to make up for their past mistakes.

Executives and insiders at the luxury home athletic equipment maker Peloton have cashed out over the last year to the tune of hundreds of millions of dollars, benefiting massively from the unexpected financial benefits of the COVID-19 pandemic. Now, as the company’s share price is in free fall, workers appear likely to bear the brunt of leadership’s bad decisions. 

To rein in costs and boost the share price, Peloton is reportedly working with the consulting firm McKinsey & Co. as it plans to cut staff, halt production, increase prices, and close stores, all while potentially piling extra work on low-level employees. “Morale is at an all-time low,” one employee told CNBC. “The company is spinning out so fast.”


Bosses are reportedly targeting cuts within the apparel, e-commerce, and retail divisions and looking to get rid of as much as two-fifths of the sales and marketing teams, as well as weighing whether to ask retail employees to field customer service calls when they’re not busy, according to audio of a meeting leaked to Insider. Fifteen stores are reportedly at risk of closure. 

"We can make it pretty easy by just stripping out low performers,” one executive said in the meeting. 

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But the lowest performers appear to be at the top of the company. CEO and co-founder John Foley has admitted that the company was “undisciplined” in the way it hired after a massive surge in interest during the initial phases of the COVID-19 pandemic, which shut down gyms around the world and led people to search for a way to exercise at home. Maybe just as importantly, company leadership appears to have overestimated how many new people would want to purchase at-home machines moving forward. As a result, Peloton now has “thousands of cycles and treadmills sitting in warehouses or on cargo ships,” according to CNBC, and plans to halt production of its basic bike for two months starting in February, after already doing the same for its souped-up “Bike+”  bike in December, according to documents reviewed by CNBC. 

The company will also temporarily stop making its basic treadmill and does not expect to make any additional of its “Tread+” treadmills in fiscal 2022.  


Theoretically, such a glut of inventory would lead to a bunch of potential deals, but Peloton is going to start charging an additional $250 to set up and deliver some of its bikes and $350 for some treadmills, according to the Wall Street Journal. The company has said in previous statements that "continued constraints are driving up costs.” That reportedly brings the price for a Peloton bike to $1,745 and Peloton treadmill to $2,845, which is at least part of the problem.

The share price is crashing like a bat through hell now, but it has been tumbling dramatically ever since early last year, when it hit highs well above $150. After that, the pandemic-pumped stock started to deflate. By the fall, the company announced a freeze on hiring and parties. By Thursday, the share price was hovering below $25. 

Before the crash, Peloton upper echelons got rich. Over the last year, executives and insiders reportedly sold $496 million in stock according to Securities and Exchange Commission filings. That includes the company’s president, William Lynch, who nabbed $105 million, and Foley, who sold $119 million. 

Soon after, CEO John Foley and his wife hosted a December black-tie holiday party at the Plaza Hotel, which was attended by some of the company’s instructors, understandably angering a lot of the employees. Foley eventually told the company in an email that it was “a personal party” to “celebrate all NYC has been through over the past two years” and that it was “not officially affiliated with Peloton in any capacity,” according to the New York Post

The company did not respond to a request for comment. 


soulcycle, exercise, athleticwear, covid

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