Peloton last week informed its employees that it is slashing approximately 780 jobs and closing a number of its retail locations.
Some prices will also be hiked on some equipment as part of a bid to cut costs and become profitable.
It is currently unclear how many retail stores will be closed, however the fitness tech company said an “aggressive” reduction will begin in 2023. The pace of closures will depend on how quickly Peloton can negotiate getting out of leases.
Peloton has claimed it will exit the last-mile logistics space by closing its remaining warehouses and shift delivery to work to third-party providers, CNBC reported.
READ MORE: Peloton to stop manufacturing its own exercise equipment
Employees who work in its in-house support team, which are mainly located in Tempe, Arizona, and Plano, Texas, instead will rely on third parties.
The move comes as part of new CEO Barry McCarthy’s strategy to help the company turn around its fortunes after unprecedented growth during the pandemic meant that when the sector returned to normal, Peloton suffered massively, losing huge sums of money and watching its share price crash.
“The shift of our final mile delivery to 3PLs will reduce our per-product delivery costs by up to 50% and will enable us to meet our delivery commitments in the most cost-efficient way possible,” McCarthy wrote in a memo to employees seen by CNBC.
“These expanded partnerships mean we can ensure we have the ability to scale up and down as volume fluctuates,” he wrote.
So far, Peloton’s stock has fallen by 60% this year, hitting an all-time low of $8.22 in mid-July.
