Peloton layoffs: Headcount reduced by 11%, engineering teams impacted in cost-cutting move

Core Insights - Peloton Interactive Inc. has announced an 11% reduction in its workforce, primarily affecting engineering teams as part of cost-cutting measures [1][3] - The layoffs are part of a previously announced $100 million cost-cutting initiative aimed at optimizing operations and creating efficiencies [3][4] - The company has been struggling with low sales, particularly for its new AI-powered bikes and treadmills, which have not significantly boosted growth [2][5][6] Company Actions - CEO Peter Stern communicated the job cuts to employees on January 30, 2025, indicating a shift in operational strategy [1] - Peloton's spokesperson emphasized the importance of these actions in supporting a return to growth while expressing gratitude for the contributions of departing employees [4] - The company has raised prices across its product range, increasing equipment costs by an average of 11% and subscription fees by about 19%, raising concerns about attracting new members [7] Product and Market Challenges - Peloton has faced a prolonged sales slump since the end of pandemic lockdowns, as consumers have returned to outdoor and gym workouts [5] - Recent product upgrades, including redesigned bikes and treadmills featuring the Peloton IQ AI platform, have not successfully reignited sales growth [6] - The company also issued a voluntary recall of approximately 877,800 units of its previous high-end Bike model due to safety concerns, reminiscent of a larger recall in 2023 [8] Industry Context - Peloton's layoffs are part of a broader trend in the tech industry, where several companies, including Meta Platforms and Amazon, have also announced significant job cuts [9]