Peloton weakens and applies strong job cuts and store closures

Peloton Interactive Inc will undergo a restructuring by eliminating jobs, closing stores and raising the prices of their exercise equipmentto shore up its revenue and improve cash flow, Reuters reported.

The company, led by Barry McCarthy, is implementing a series of measures that include cost cuts to stabilize your business as demand for its pandemic-driven exercise equipment rapidly slows.

Peloton outlined an aggressive plan to reduce the number of stores in the United States, as well as the elimination of 780 jobs in warehouses and customer service teams.

Switching last-mile delivery to third-party logistics providers will reduce delivery costs per product by up to 50%CEO McCarthy said in a memo seen by Reuters.

The company is also increasing the prices of its machines in 5 markets, including the United States and Canada. A message was shared on the Peloton website that reads:

“In April 2022, we are lowering our equipment prices to make the entry point for new members more affordable. Today, we’re updating the prices of our award-winning premium hardware. Inspired by the progress we have made on our transformation journey, we are adopting a more strategic pricing strategy for our premium products. The price of our original Peloton Bike and the new Peloton Guide (AI-assisted strength trainer) remain unchanged in all of our markets.”

The page indicates that in the US, the price of Peloton Bike+ will increase by $500 to $2,495while the price of Peloton Tread will increase $800 to $3,495.

McCarthy says his goal is to boost Peloton’s software engineering team, calling it “the right investments” to drive growth.

After the company’s actions were known to revitalize, the shares rose 11% in afternoon trading.

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