Update: CEO Barry McCarthy claims he “misspoke” in his Journal interview. Here’s the full quote
“I joined Peloton for the comeback story, not to sell the business. And today the business is fundamentally more sound than ever and on the right path, so to be clear, there is no timeclock nipping at our heels. If my comments to the WSJ suggested otherwise, then I misspoke, as that is simply not true.
Restructuring a business requires difficult decisions that affect people’s lives. I’m grateful for the many contributions of those who have been impacted. The changes we have made, combined with the performance of the business, are moving us closer to our fiscal year-end goal of break-even cash flow, with a renewed focus on growth. We are in the business of driving performance, and the business is indeed performing. By any measure, we have made remarkable progress in record time.”
The misspeak appears to be a reference to the notion that the company may not be able to remain independent if it can’t execute a major turnaround in six months. We speculated earlier this the statement was a reference to earlier rumors that company like Amazon had floated an acquisition.
Peloton, it seems, isn’t out of the woods just yet. The once mighty connected fitness firm has been facing a steep uphill battle to turn around its fortunes. This morning, the company confirmed with The Wall Street Journal that it plans to cut another 500 jobs, under the leadership of CEO Barry McCarthy. The executive, who took over the role from co-founder John Foley early this year, has made streamlining a top priority.
Around the time of the transition, the company cut 2,800 jobs. Since then, it has undergone a number of different evasive actions, including outsourcing the production of its equipment after scrapping plans to ramp up first-party production and adding Amazon to its sales channel — both were significant moves for a company that had long made self-sufficiency a priority.
After pausing production on its hardware, the company recently revealed plans to release its first rowing machine in December. In September, Foley and fellow co-founder and Chief Legal Officer Hisao Kushi resigned from the firm.
McCarthy acknowledged Peloton’s continued struggles, setting a six-month timeline for a significant turnaround. Failing that, it seems likely that it will begin to actively court potential buyers. Amazon was among those rumored to be mulling acquisition following Foley’s resignation.