Peloton slashing 800 jobs, raising bike prices

Exercise equipment maker Peloton Interactive  said Friday it would cut more jobs and raise prices of its popular treadmill and high-end bike products as the company works to arrest a fall in revenue and improve cash flow.

Shares of the company surged 8.7% in afternoon trade after the company said in a memo that it would cut about 800 jobs and reduce its retail presence in North America.

Under Chief Executive Officer Barry McCarthy, Peloton has implemented a slew of measures to cut costs after demand for its exercising equipment plummeted as people went back to working out at gyms.

The New York-based firm had said in July it would halt all in-house production of its bikes, move manufacturing to partners and cut around 570 jobs. 

“Job one is generating free cash flow by right-sizing our inventory commitments and converting many of our fixed costs to variable costs,” McCarthy said in a memo to employees shared with Reuters on Friday.

Bloomberg News first reported on the job cuts and overhaul.

In its latest move to cut losses, Peloton said on Friday it will raise prices of its Bike+ and Tread machines in five markets.

Peloton, which had lowered the prices for its products earlier this year, said it would now hike Bike+ by $500 to $2,495, and its Tread by $800 to $3,495 in the United States.

In Canada, the price of the Bike+ would increase by C$800 ($625.98) to C$3,295, while the price of Tread would increase by C$1,100 to C$4,495, Peloton added.