Business

Peloton CEO resigns, thousands of workers to be cut amid plunging demand for workout equipment

By Aaron Gregg and Todd C. Frankel
Today at 8:22 a.m. EST|Updated today at 5:47 p.m. EST

CORRECTION

A previous version of this article incorrectly said product recalls contributed to $51.8 billion in legal costs for Peloton last year. The cost was $51.8 million. The article has been corrected.

Peloton said Tuesday it plans to lay off 2,800 people and remove chief executive John Foley as part of a corporate overhaul — a move that comes amid increasing pressure from investors upset that the former Wall Street darling has seen its share price drop by nearly 75 percent in the past year.

Peloton had been one of the pandemic’s business success stories, seeing demand for its stationary bikes and treadmills soar during the work-from-home tech boom in 2020 when many in-person gyms were closed. Its stock price rocketed more than 600 percent. Its online fitness classes were lauded by fans and lampooned on “Saturday Night Live.”

But the company appeared to struggle as many people resumed their pre-covid routines last year, and maintaining sales growth became difficult.

The restructuring plan announced Tuesday is estimated to shave some $800 million in annual costs, in large part through layoffs that the company said would affect “nearly all of our operations and across almost all levels.” The company is also scrapping plans for a new production facility in Ohio.

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By Aaron Gregg
Aaron Gregg is a business reporter focused on corporate accountability and the intersection of business and government. Twitter https://twitter.com/Post_AG

By Todd Frankel
Todd C. Frankel is an enterprise reporter on The Washington Post's Financial desk. He joined The Washington Post in 2014 and previously worked as a reporter at newspapers in St. Louis; Everett, Wash.; and Charleston, W.Va. Twitter https://twitter.com/tcfrankel