Peloton has 6 months to show how it can grow, CEO says

Peloton has six months to show that its latest growth initiatives can help it survive as a standalone company, CEO Barry McCarthy said, according to a report from The Wall Street Journal.

Peloton also plans to cut 500 jobs, or about 12% of its workforce, the Journal said, adding that employees were told of the reductions Thursday. The company has already had multiple layoff rounds this year.

Shares of the fitness-product company fell more than 1% in premarket trading following the report.

“If we don’t grow,” McCarthy, who took over as CEO earlier this year from co-founder John Foley, told the Journal, “We need to grow to get the business to a sustainable level.”

A Peloton spokesman told CNBC that McCarthy’s was focused more on whether the company’s new initiatives can show their worth in the next six months.

McCarthy has overseen drastic changes to Peloton’s business model this year as the company struggled after a boom during the earlier days of the Covid pandemic. A former Spotify and Netflix executive, he has pushed the connected-fitness company’s business into subscriptions while broadening its products’ availability beyond Peloton’s direct-to-consumer roots.

Earlier this week, the company said it would put its bikes in every Hilton-branded hotel in the United States. It recently announced partnerships to sell equipment in Dick’s Sporting Goods stores and on Amazon.

This is a developing story. Check back for updates.