Peloton has about six months to complete turnaround, CEO says
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Peloton CEO Barry McCarthy just started the clock on the company's effort to remain independent.
Driving the news: The personal fitness business has about six months — roughly until April — to reverse its spiraling fortunes, McCarthy reportedly told WSJ.
That basically tracks to one year after McCarthy launched his turnaround plan, and he tried to clarify his comments in a subsequent press release:
- "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."
Why it matters: Peloton is in the midst of a massive turnaround strategy centered on going mass market and cutting costs.
The latest: The company today announced its fourth round of layoffs this year — with 500 jobs cut on top of the thousands already eliminated.
- Cuts in marketing are heaviest in this latest round.
- McCarthy took over in February. The former Netflix and Spotify CFO recently told investors at a Goldman Sachs conference that he came out of retirement to do one thing — fix Peloton — and that he would go back into retirement once the job was finished.
The big picture: Peloton is one of several companies that bet too heavily on the staying power of pandemic trends.
- Shopify cut staff this year after it misjudged e-commerce trends and expanded too rapidly.
- FedEx is closing locations, as well as cutting costs and worker hours, after overestimating how long demand would last as its costs rose.
