Peloton To Slash Jobs And Hike Prices To Cover Inflation

Peloton is considering eliminating jobs and reassessing the cost structure to make up for its recent struggles. The company has seen a dramatic decline in its fortune lately coupled with a number of PR disasters. The company has sought the assistance of a management firm, McKinsey & Co., which will lead to store closures, according to reports.

CNBC reported that the company is considering closing about 15 of its 123 stores across the globe as well as slashing jobs at its apparel division. The company is also considering the store employees to handle the customer calls when they are "less busy", reported the wire.

The company has hiked the total cost of its fitness equipment as the buyers will have to pay $250 for the delivery and set up for the Bike and $350 for the Tread. The company cited inflation as the primary reason behind the price hike.

Dara Treseder, the chief marketing, and communications officer of the company had said in an earlier meeting, "Right now, people are raising prices. Ikea just raised prices. We want to go in the middle of the pack."

The company saw a rapid 440% in 2020 during the early days of the pandemic when the gyms were closed and people had to find a way to exercise at home. Since then, the company has seen an equally drastic fall in 2021, dropping 76%. The recent market cap for the company has stooped to $10.2 billion. In the previous year, the company has managed revenue growth of just 6%, compared to 250% the year before. The passing quarter saw only 161,000 new users join the app, the lowest addition since the start of the pandemic.

Back in November, Chief Financial Officer Jill Woodworth had said, "Some of these identified areas of savings include making significant adjustments to our hiring plans across the company, optimizing marketing spend, and limiting showroom development."

During the same presentation, the company also dropped its fiscal outlook for revenue in 2022 to $4.4 billion and $4.8 billion, from $5.4 billion.

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