Peloton announces yet another cut in payroll

Oct. 6 (UPI) -- The head of struggling fitness technology company Peloton said Thursday it was necessary to enact deep cuts to its payroll to achieve positive cash flow.

This is the latest in what has been a steady string of uncomfortable news Peloton CEO Barry McCarthy has delivered to the staff at the once-darling of the fitness industry.

"I know many of you will feel angry, frustrated and emotionally drained by today's news, but please know this is a necessary step if we are going to save Peloton, and we are," he said in a Thursday memo, according to Bloomberg. "Our goal is to control our own destiny and assure the future viability of the business."

Peloton will cut 500 from its global workforce, amounting to about 12% of total payroll. Shares for the company (PTON), traded on the tech-heavy Nasdaq Composite, were up on the news.

The company saw substantial growth as consumers built home gyms during the sweeping restrictions imposed during the height of the COVID-19 pandemic. As those restrictions eased and gyms reopened, Peloton was forced to cut 2,800 jobs in February, 570 in July and another 800 in August.

Peloton said the latest reduction in headcounts, however, means the "bulk of our restructuring work" is over, Bloomberg added.

With a bloated inventory left over from the depth of the pandemic, Peloton sought to offer its equipment online through retail giants such as Dick's Sporting Goods and Amazon. This week, it established a partnership with Hilton Worldwide Holdings to put the exercise bikes in all 5,400 U.S.Hilton-branded locations and 18 of Hilton's subsidiaries, including Doubletree and Embassy Suites.

The company's CEO said that future partnerships, alongside growth in subscriptions to its hosted exercise classes, means more revenue and future capital flows for the company.

"I know we can make Peloton a great comeback story if we continue to fight for it," McCarthy said. "As I have said, this is not easy, but I've never been more confident in Peloton and where we are going."

Peloton founder John Foley stepped down as CEO in February.