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LAKELAND — A major restructuring effort underway at Peloton Interactive is being felt locally as 58 people in Lakeland have lost their jobs as the company cut nearly 3,000 of its employees worldwide Feb. 8.
Peloton announced the local layoffs in a letter to the state sent to meet federally mandated Worker Adjustment Retraining and Notification Act requirements.
In the letter, the company states that it is closing its local office in a Lakeland industrial park at 5725 New Tampa Highway. The cuts, which are permanent and were effective immediately, affect field specialists, technicians, warehouse associates and supervisors.
Peloton, which makes stationary exercise bicycles, announced the cost-cutting plan Feb 8. It said 2,800 job were being eliminated across the entire company as it worked meant to streamline operations. About 20% of corporate employees were affected. The company also announced it was no longer moving forward with its Peloton Output Park in Ohio. The facility was going to be its first U.S. factory and, according to a May 24 press release, would have brought more than 2,000 jobs to the state.
The company told shareholders the plan would generate about $800 million in annual savings and that it’s reducing planned expenditures this year by $150 million. The moves were made “to position the business for long-term growth while establishing a clear path to consistent profitability and sustainable free cash flow.”
The announcement of the cost-cutting plan came on the same day as CEO John Foley stepped down and Barry McCarthy, the former CFO of Spotify, took over. Foley remains executive chairman.
Peloton thrived during the pandemic as the suddenly homebound rushed to buy exercise equipment. But as gyms have re-opened, the demand fizzled. According to NASDAQ, “Peloton stock has seen a massive sell-off, declining by almost 30% year-to-date, and by close to 85% from all-time highs seen in late 2020.”
While employees in Lakeland and elsewhere likely were obviously disappointed to hear the news, Wall Street wasn’t. Peloton’s stock rose 25% to $37.27 on the news of the changes and chatter that the company might be sold soon.
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