Business

Peloton freezes recruitment after it lowered its forecast and shares fell 35%

Kari Gandhi rides a Peloton stationary bike at his home on April 6, 2020 in San Anselmo, California. More and more people are turning to Peloton due to coronavirus (COVID-19) asylum orders.

Ezra Shaw | Getty Images

As CNBC learned, Peloton stopped recruiting across all departments immediately during a general meeting on Friday, a day after it cut its annual forecast amid slowing growth in sales of its fitness products.

It was not immediately clear how long the hiring moratorium would last.

A Peloton spokesman did not immediately respond to CNBC’s request for comment.

During a conference call on Thursday, Peloton executives hinted to analysts that they will be cutting costs in the near future to cope with sluggish revenues and growing user numbers.

“Some of these areas of savings identified include making significant changes to our hiring plans at the company, optimizing marketing costs and limiting showroom development…” CFO Jill Woodworth said during a phone call.

Peloton shares fell 35% at the market close on Friday, losing more than $ 9 billion in market value. The stock is down about 63% since the start of the year.

In 2020, the company saw rapid growth as consumers stayed at home during the pandemic. And Peloton has invested heavily to meet this demand. It acquired Precor, another fitness equipment manufacturer, for $ 420 million. He also invested heavily in air travel to expedite shipments from overseas. In recent months, the company has stepped up marketing efforts to sell its original bicycle product, now 20% cheaper, and its redesigned Tread treadmill.

However, now that more and more people are returning to gyms like Planet Fitness., or decide to purchase another home fitness option like Tonal or Hydrow., Peloton is struggling to adapt to the future.

The business was on the verge of hiring. Peloton employed 6,743 people in the United States as of June 30, more than double the estimated 3,281 people a year earlier, according to annual reports.


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