Peloton has announced that it is set to slash around 2,800 roles as part of a series of measures to “position the business for long-term growth while establishing a clear path to consistent profitability”.
Following the restructure, the fitness group said it expects to achieve at least $800m (£590m) of savings through operating expense efficiencies.
It noted that the redundancies will happen across nearly all business operations in a bid to streamline reporting structures and “create clearer lines of accountability”. Corporate positions will be reduced by approximately 20% through the move.
The group will also downsize its owned and operated warehouses and delivery teams and expand its commercial agreements with third party logistics providers.
Alongside the restructure, the group said it plans to reduce its capital expenditures by approximately $150m (£111m) this year. The restructuring program itself is expected to result in around $130m (£96m) in severance cash charges, as well as other exit and restructuring activities.
Other measures for the group’s streamlining include winding down the development of its Peloton Output Park (POP) manufacturing plan. This will reportedly result in $60m (£44m) in restructuring capital expenditures, which is included in the company’s revised full year guidance.
Peloton noted that its roster of instructors as well as the “breadth and depth” of its content will not be impacted by the latest moves.
John Foley, co-founder of Peloton and newly appointed executive chair, said: “Peloton is at an important juncture, and we are taking decisive steps. Our focus is on building on the already amazing Peloton Member experience, while optimising our organisation to deliver profitable growth.
“With today’s announcements, we are taking action to ensure Peloton capitalises on the large, long-term Connected Fitness opportunity. This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline.”
He added: “These decisions, particularly those related to our impacted Peloton team members, were not taken lightly. We greatly value the contributions of our talented colleagues and are committed to supporting impacted team members in their transitions. We thank our global team members for their focus and dedication through this process.”