Peloton to cut jobs, close stores and raise prices throughout the company

Aug 12 (Reuters) – Peloton Interactive Inc ( PTON.O ) said on Friday it would cut jobs, close stores and raise prices on its fitness equipment, including treadmills and stationary bikes, as it undertakes a company-wide revamp to shore up revenues and improve cash flow.

Shares in the company rose about 1[ads1]1% in afternoon trade after the company said in a note that it would cut about 800 jobs and reduce retail sales in North America.

Under CEO Barry McCarthy, Peloton has implemented a number of measures, including cost-cutting, to stabilize its business as pandemic-fueled demand for treadmills and exercise bikes quickly surges.

On Friday, the company outlined a plan to aggressively reduce its retail presence in the United States and eliminate a number of jobs in warehouses and customer support teams.

Moving last-mile delivery to third-party logistics providers will reduce delivery costs per product by up to 50%, McCarthy said in the memo seen by Reuters.

The company is also raising the prices of its Bike+ and Tread machines in five markets, including the US and Canada. (https://bit.ly/3peZhNv)

The company, which lowered the prices of its products earlier this year, said it would now raise prices by $500 to $2,495 on the Bike+ and by $800 to $3,495 on the Tread in the US.

McCarthy, a former director of Netflix Inc ( NFLX.O ), said he aimed to strengthen Peloton’s software engineering team, calling it the “right investments” to drive growth.

($1 = 1.2782 Canadian dollars)

Reporting by Nathan Gomes and Kannaki Deka in Bengaluru; Additional reporting by Deborah Sophia; Editing by Krishna Chandra Eluri and Anil D’Silva

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