The pandemic sucked. Four years ago, we were all stuck at home and stayed stuck at home for months to come. With all of us stuck in our homes, there has been a severe COVID-19 outbreak in some products. Food delivery services have absolutely blown up, as has Zoom and the like .
The same goes for Peloton and its line of exercise equipment. People bought bikes and treadmills in droves, increasing the company’s market cap from $6 billion to $50 billion. However, what goes up must come down, and Peloton’s market cap shrank to $10 billion by 2022 and is now around $1 billion. The company’s pandemic-era success story is officially over and the company is now focusing on cost cutting. So that means layoffs. Peloton lays off 15 percent of its workforce, so 400 people.
Aside from these massive cuts, the company is . Barry McCarthy, CEO, president and board director, is also stepping down after two years in office. He was previously CFO at Spotify and Netflix. Peloton says it is in the process of finding a successor, with current chairwoman Karen Boone and director Chris Bruzzo serving as interim CEOs.
However, the company is expanding its international reach and announcing a “more targeted and efficient” marketing strategy abroad. Peloton hopes all of these moves will collectively reduce annual expenses by $200 million by the end of fiscal 2025.
All of this came after the company reported some really bad revenue and loss numbers for the third quarter of 2024, with a 21 percent drop in paid subscriptions compared to 2023. Unfortunately, the second quarter wasn’t much better. Not that the stock market really means anything, just look at Tesla or that bizarre Trump stock, but Peloton’s shares have risen from $156 in 2021 to, uh, less than $3 today.
This isn’t just about “people going outside again,” as the company has experienced numerous controversies that have nothing to do with the pandemic. The Tread+ treadmill 90 injuries and death of a child. Peloton also has a security problem. It’s been a bad few years.
All of this doesn’t mean that Peloton can’t turn things around, as it’s a pretty iconic brand in the industry. However, there is still work to be done to reverse this decline.
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