Platoon to cut jobs, close stores and raise prices in company-wide revamp

Aug 12 (Reuters) – Peloton Interactive Inc (PTON.O) said Friday it would cut jobs, close stores and raise prices for its fitness equipment, including treadmills and high-end bicycles, as it undergoes a company-wide revamp to boost its sales and improving cash flow.

Shares of the company rose about 11% in afternoon trading after the company said in a memo it would cut about 800 jobs and reduce its retail presence in North America.

Under Chief Executive Officer Barry McCarthy, Peloton has taken a slew of measures, including cost-cutting measures to stabilize his business as pandemic-induced demand for its treadmills and stationary bikes declines rapidly.

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On Friday, the company presented a plan to aggressively reduce its retail presence in the United States and eliminate some jobs in warehouses and customer support teams.

Moving last-mile delivery to third-party logistics providers could cut delivery costs per product by as much as 50%, McCarthy said in the memo seen by Reuters.

The company is also raising the prices of its Bike+ and Tread machines in five markets, including the United States and Canada. (https://bit.ly/3peZhNv)

The company, which cut prices for its products earlier this year, said it would now raise prices by $500 to $2,495 for Bike+ and $800 to $3,495 for Tread in the United States.

McCarthy, a former director of Netflix Inc (NFLX.O), said his aim was to boost Peloton’s software engineering team, calling it “the right investment” to drive growth.

($1 = 1.2782 Canadian dollars)

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Reporting by Nathan Gomes and Kannaki Deka in Bengaluru; Additional reporting by Deborah Sophia; Editing by Krishna Chandra Eluri and Anil D’Silva

Our Standards: The Thomson Reuters Trust Principles.

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