Peloton's Post-Pandemic Dive Continues: More Layoffs, CEO Is Out, And Glitches Abound
Peloton was one of the biggest success stories of the pandemic era, but the company's descent — from recording its first ever profitable quarter to massive recalls — is a cautionary tale, as well. Just over a quarter into 2024, the company's woes have taken another serious turn. Peloton has today announced that it is eliminating 400 roles at the company, which translates to roughly 15% of the company's workforce.
Aside from the obvious reduction in the operational costs that the move will bring, the company hopes that cutting the headcount would also help consolidate resources, improve efficiency, and allow for more targeted workflow. Peloton won't be making any changes to its retail store business. The announcement comes on the same day that the company is announcing its Q1 2024 results.
While the job cuts are not surprising considering the company's fiscal performance in the recent quarters and product-related woes, some key changes are also happening in the leadership roles. Barry McCarthy, who served as the President, CEO, and a key member of the board, is also stepping down from his role. Director Chris Bruzzo and chairperson Karen Boone will serve as the interim CEOs together until the company finds its next chief.
This is the second top-tier leadership exit at Peloton in as many years. In early 2022, Peloton co-founder and CEO John Foley stepped down from his role. The departure, which was accompanied by job cuts and the exit of another co-founder's exit, came in the wake of slower sales and mismanagement allegations.
Little redemption from Peloton's hardware either
In May last year, Peloton issued a recall affecting over two million bikes over safety issues. This was preceded by a similar recall of its treadmills in the wake of a child's reported death and safety concerns. Historically, Peloton's recalls have plunged the company's shares to record low levels. However, in the quarters that followed, which entailed Peloton promising higher quality control standards, the company's fortunes have failed to experience a revival. A key reason is that customers keep running into a wide range of issues with their Peloton fitness gear.
One Reddit complaint mentions how the screen interface keeps crashing during workouts and disturbs the calibration, and that even a hard reset won't fix the problem. Multiple users also contributed similar stories about random freezes plaguing their Bike that hinder online classes from loading in some cases. It seems UI or volume adjustments trigger the interface to go haywire during workouts, but so far, Peloton hasn't issued a statement on how to fix it.
The company recently fixed another issue where the Bike hid the pedaling cadence details, owing to a screen orientation bug. However, it's not just existing hardware that is giving a headache to customers. Shoppers who purchased new bikes are also running into a weird problem that flashes a "There is an issue with your device" error message on their new machine. One affected customer reports that booting the bike into a special software mode apparently helps fix it.
Issues with sleep mode, Guide system, and sensitivity problems with the resistance knob have also been reported by multiple users in the past few months.