Aug 12 (Reuters) – Peloton Interactive Inc ( PTON.O ) said on Friday it will cut jobs, close stores and raise prices on its exercise equipment, including high-end treadmills and bikes, while undertaking a company-wide revamp to bolster its revenue and improve cash flow.
The company’s shares rose about 11% in afternoon trade after the company said in a note that it would cut about 800 jobs and reduce its retail presence in North America.
Under CEO Barry McCarthy, Peloton has implemented a series of measures, including cost cuts, to stabilize its business as demand for its treadmills and exercise bikes quickly fades due to the pandemic .
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On Friday, the company laid out a plan to aggressively reduce its retail presence in the United States and eliminate a number of jobs in warehouses and customer service teams.
Shifting final-mile delivery to third-party logistics providers will reduce per-product delivery costs by up to 50 percent, McCarthy said in the note seen by Reuters.
The company is also raising the prices of its Bike+ and Tread machines in five markets, including the United States and Canada. (https://bit.ly/3peZhNv)
The company, which cut prices on its products earlier this year, said it would now raise prices from $500 to $2,495 on the Bike+ and from $800 to $3,495 on the Tread in the United States.
McCarthy, a former Netflix Inc ( NFLX.O ) executive, said he aimed to boost Peloton’s software engineering team, calling it the “right investments” to drive growth.
($1 = 1.2782 Canadian dollars)
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Reporting by Nathan Gomes and Kannaki Deka in Bangalore; Additional reporting by Deborah Sophia; Editing by Krishna Chandra Eluri and Anil D’Silva
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