Peloton To Layoff 800 Jobs, To Hike Prices Of Treadmills

(RTTNews) - Fitness equipment maker Peloton Interactive (PTON) Friday announced it would cut nearly 800 more jobs and raise prices of its Bike+ and Tread machines. The company also revealed plans to outsource functions such as equipment deliveries and customer service.

The company disclosed the changes in a memo to employees, which also include plans to gradually close several of its retail showrooms, starting next year.

"We have to make our revenues stop shrinking and start growing again," CEO Barry McCarthy said in the memo provided to Bloomberg, adding that the changes are essential to making Peloton cash-flow positive again. "Cash is oxygen. Oxygen is life."

Since McCarthy took over the reins of the company, Peloton has implemented a several measures to curb costs as demand for its exercising equipment plunged as people went back to working out at gyms.

In July, the New York-based company said it would halt all in-house production of its bikes, move manufacturing to partners and cut around 570 jobs.

The company said the shift was a natural progression in Peloton's strategy to simplify its supply chain and focus on technology and best-in-class content to continue driving the business forward as the leading global Connected Fitness company.

Rexon will become the primary manufacturer of the hardware for Peloton's iconic Bike and Tread product lines.

Early this year, Peloton announced plans to cut about 2800 jobs globally. It also announced a series of other steps including realigning business operations, reducing manufacturing footprint, and enhancing capital and operational efficiency to position the business, that could save at least $800 million annually.