Fails of 2022: Peloton’s year of layoffs, gaffes, and ship metaphors

The year 2021 wasn’t great for Peloton. Its stock tanked. Its premium treadmill killed a small child, injured several others, and wound up being recalled. Its new, affordable treadmill also ended up being recalled before it ever officially launched. By December, Peloton was the butt of everyone’s jokes after Mr. Big, a major Sex and the City character, died on his Peloton Bike in the first episode of HBO’s sequel And Just Like That…. Peloton tried to clap back with a cheeky commercial. That backfired. The year ended with murmurs about a potential sale.

And yet, somehow, 2022 was worse.

Despite setting out to take back control of its own narrative, all Peloton has managed to do is stick its foot in its mouth. It probably hasn’t helped that McCarthy tried to spin a $1.2 billion loss as “substantial progress,” using a convoluted metaphor likening Peloton to a careening cargo ship in the midst of a daring Mediterranean rescue.

It wasn’t a great year for Peloton products either. The Peloton Guide hasn’t really taken off, while the long-awaited Peloton Row has been the victim of supply chain issues. The Row was teased back in May, preorders began in September, and deliveries were slated for December. But in its Q1 2023 earnings call, McCarthy confirmed that Peloton’s rower inventory would be constrained even as it expected demand to grow. Neither product was bad. I enjoyed using both when reviewing them. They just weren’t enough to give Peloton its momentum back.

Earnings call after earnings call, McCarthy tried to convince investors that the company was successfully reversing its fortunes, only to see its stock price plunge further. Investors like seeing numbers go up, not down. And it makes sense why some investors aren’t buying Peloton’s comeback story. (One activist investor group even published a scathing 65-page slideshow on all the ways Peloton had royally cooked the golden goose.)

The bottom line is that the company cut more than 4,500 employees from its workforce in four rounds of layoffs, shuttered its domestic manufacturing ambitions after investing hundreds of millions of dollars, and decided to downsize its retail presence. At this point, its shares have lost 90 percent of their value in the past 12 months.

To be fair, turnarounds do take time. But the harder you fall, the longer it takes to regain your footing, and the more difficult it is to rebuild. Peloton fell real hard.

Even so, it’s hard to write the company off completely. The content hasn’t changed, and while the connected fitness boom has slowed, it’s far from over. Peloton still has a solid product even if it has a dubious business plan. Luckily for Peloton, its customers are a hardcore, extremely loyal bunch. The thing is, they’re not the ones Peloton needs to win over.

In 2023, it won’t be a question of if Peloton will recover. It’ll be whether everyone else will give it the chance.