Fitness tech firm Peloton is cutting 500 jobs – 12% of its employees – in its latest round of layoffs. The announcement of the news hasn’t gone entirely to plan either. CEO Barry McCarthy gave an interview to the Wall Street Journal to discuss Peloton’s ongoing turnaround efforts, only to see the newspaper splash big on his suggestion that the company “has six months to prove it can survive on its own”.
In a later memo to staff that swiftly leaked to The Verge, McCarthy played down the sense of a looming, existential deadline. “We were expecting a story about redemption and the successful turnaround of Peloton, which is why we invested time on background briefing them on the state of our turnaround,” he wrote.
“The headline should have been that recent strong execution and today’s restructuring have positioned us to meet our fiscal year-end goal of break-even cash flow, with a renewed focus on accelerating our growth, which is why I’ve never felt more optimistic about our future… Instead, the article creates the impression we have six months to live, which is at odds with the story we told and the state of the business.”
The risk for Peloton is that if suppliers and partners (music companies included) pay more attention to the ‘six months to live’ line, any loss of confidence could present more obstacles to the turnaround efforts.