A man walks past a Peloton store in Manhattan on May 05, 2021 in New York City.
John Smith | Corbis News | Getty Images
Peloton is cutting 500 more jobs in a move that CEO Barry McCarthy says should allow the struggling fitness equipment maker to return to growth.
The cuts, which represent about 12% of Peloton’s workforce, mark a turning point for the company, McCarthy told CNBC on Thursday. Peloton has already seen several rounds of layoffs this year.
“The restructuring is complete with today’s announcement,” McCarthy said. “Now we are focusing on growth.”
McCarthy said the company now needs to prove that its recent series of strategy changes, including equipment leasing and partnerships with Amazon and Hilton, can help the company grow.
Peloton shares tumbled in premarket trading. The stock is down about 76% so far this year.
McCarthy oversaw drastic changes to Peloton’s business model this year as the company struggled with sales after a boom in the early days of the Covid pandemic. A former Spotify and Netflix executive, he pushed the company’s business further into subscriptions while expanding the availability of its products beyond Peloton’s direct consumer roots.
Earlier this week, the company announced that it would put its bikes in all Hilton-branded hotels in the United States. He recently announced partnerships to sell gear at Dick’s Sporting Goods stores and on Amazon.
McCarthy spoke to CNBC after The Wall Street Journal reported on his remarks about where the company stands six months from now.
“If we don’t grow,” said McCarthy, who took over as CEO from co-founder John Foley earlier this year, “we need to grow to bring the business to a sustainable level.” The Journal also first reported on the layoffs.
Beyond that point, however, the company, which has slowed the pace of its cash burn, is “extremely well capitalized” and “very liquid,” McCarthy said in an interview with CNBC. And he’s still on track to meet his cash flow targets for the year.
“I feel about as optimistic as ever,” he said, reflecting on the changes the company has made over the past few months.