Peloton Interactive Inc. has made sad news for its employees as it has announced it is cutting down on jobs.
Peloton Cuts Jobs and Raises Prices
Peloton has announced that it is closing down stores, which would result in laying off employees. As a result, Peloton will be cutting down more jobs. Peloton had already cut down jobs in the past in order to deal with the company’s expenses.
In addition to the above, Peloton has announced that it is also in the process of increasing the prices of its products. The company has revealed that it will be increasing the prices of high-end bike products as well as the popular treadmills.
Peloton Wants to Increase Revenue
According to Peloton, it is aiming to fight off extra costs as well as increase its revenue. For now, Peloton is trying to stop the revenue figures from falling any further.
For this purpose, it has to cut down on costs and jobs. Furthermore, Peloton is increasing product prices to increase the revenue so the falling figure can be balanced somehow. The company’s focus is to increase the cash flow so they do not suffer from any more losses.
Peloton Shares Rose by 11%
Right after the announcement, the share prices for Peloton have risen 11% in the latest stock market trading session. Peloton has announced that to fight off expenses, it will need to cut several hundred jobs.
According to the maker of the exercise equipment, it may have to cut down 800 jobs. Moreover, the company is also planning to reduce its presence in the regions where it is recording low demand.
Peloton officials revealed that they recorded a low demand in North America for their retail products, so they have decided to close their stores.
The company will now have a lesser number of stores in the North American region in order to fulfill customer demand.
From Rising to Demise
Peloton had recorded a great surge in demand for its products during the pandemic. Exercise enthusiasts were confined to their homes like the rest of the world and therefore, they purchased exercise equipment at their homes.
This is the reason why the sales for Peloton skyrocketed. Now that the pandemic has lost its power and people are living as normal, they have started rejoining fitness centers.
As a result, the sales for Peloton have started experiencing demise and the company may not be able to enjoy the same growth it recorded during the pandemic.
Peloton understands that having fewer stores in North America would reduce its popularity and recognition. Still, the company has to make the harsh decision in order to deal with the difficult situation at hand.