19 ms·

Peloton replaces CEO and lays off 2,800 people

• java-man 5y ago
  Peloton employed 2,800 people? Doing what?
  • adoxyz 5y ago
    Sales and marketing.
  • purerandomness 5y ago
    Doing things that don't scale.
  • trimbo 5y ago
    That's 20% of the workforce so they still employ over 10,000. (Edit: This is incorrect -- see reply below!) Based on a quick scan of glassdoor, I'd guess most of the people are in sales, customer support, bike repair/delivery, etc.
    • teh_klev 5y ago
      I think you're interpreting that 20% from the article incorrectly. It actually says: "cutting 2,800 jobs, including approximately 20 per cent of corporate jobs at the New York City company." The headcount figures for January before this announcement were: 3281 - US 283 - UK and Germany 71 - Taiwan https://en.wikipedia.org/wiki/Peloton_Interactive https://en.wikipedia.org/wiki/Peloton_Interactive
      • trimbo 5y ago
        Whoa! Thanks for the correction!
      • Aloha 5y ago
        So they're cutting 60% of their workforce give or take - from 3600 people or so down to 835. I have to wonder what on earth those other 2800 people were doing? I would expect a company like Peloton to have a workforce of around 700-1200 people, just based on the market they're in. 20% of that in Manufacturing, Manufacturing Engineering, and Logistics 40% of that in Operations (web, sales, marketing, productions, IT, etc) 15% of that in finance and accounting cost centers 25% of that in management, supervision, product management, general executives. I guess if they had showrooms or retail operations that number might make more sense, that could add an additional 20-150 people per store (retail is headcount expensive - and how expensive varies based on square footage and desired customer experience).
        • teh_klev 5y ago
          Apparently they have (had) 123 showrooms (and perhaps concessions). So imagine if you need to keep these open 7 days a week, maybe 10 hours a day and staff them to cover holidays then you're probably looking at ~6-10 staff per site which is a fair old chunk. They might not all be full time so that headcount might go up even further. Then on top of that area managers, maybe 10-15 show rooms per manager? It all adds up. Their headcount certainly surprised me for a cycling on the internet company :)
  • acrooks 5y ago
    Well, they have about 100 brick and mortar stores. So in addition to all of the other complexities of running a large business, they surely have more than 1,000 people working in stores and store support.
• hadrien01 5y ago
  They had 2800 employees?! Why? Their product is a home bike with a screen. Plus some developers and their TV crews, I don't see how you can get to such a number
  • sigstoat 5y ago
    they do (did?) also have showrooms. customer service staff. who knows if they did their own assembling or final product qa. they certainly weren't running your average SaaS service. i'm not _too_ surprised about 2800 people. i'm surprised there's anyone left afterwards.
  • nikanj 5y ago
    Investors wanted to see the company grow, and butts-in-the-seats is one of the easier metrics to grow.
  • thebean11 5y ago
    Look at how quickly they are (were?) growing. Lots of those employees were probably working on the "next" thing, whether that's another bike or a new device or software product. It's not like all they're doing is maintaining their current iteration of bike with TV screen..
  • onion2k 5y ago
    All your comment really shows is how little you know about how many people it takes to run a large business, and that you don't really understand what Peleton do. Peleton design and manufacture their own equipment, they ship it globally, they have their own buyers and supply chains for that, They also build the tech that runs their business, from the customer portal to the video integration in the products. They make programs that include CGI and motion graphics. They do sales, and support, for nearly 6 million customers. On top of that there's payroll, and admin, and HR, and ... it's a very long list, that requires a lot of people. We're bad at estimating large numbers so our first impression is usually wrong. It's important to factor that into any reaction to a number that sounds way too high. It's always worth taking a step back and thinking about why it might actually be correct.
• jeffrwells 5y ago
  > Peloton announced Tuesday that it was cutting 2,800 jobs, including approximately 20 per cent of corporate jobs at the New York City company According to the article it sounds like they had ~14,000 employees Edit: I misread. 20% of corporate jobs were cut which contributed to the 2800 number
  • egberts1 5y ago
    Or 20% of just the corporate and 100% of everybody else. They’re still a small company.
    • jeffrwells 5y ago
      Oh got it, yep I misread it thanks
  • tyrfing 5y ago
    8,662 employees at the end of June last year.
• chromaton 5y ago
  I believe they had install crews to go around and set up their bikes in people's homes. This had to be a lot of employees right there.
  • thedougd 5y ago
    It was outsourced to freight companies. The same companies that deliver and put together your Pottery Barn furniture. There was nothing special about their 'white glove' delivery.
    • ThisIsTheWay 5y ago
      That is not true in all locations. They have delivery specialist reqs open right now. https://boards.greenhouse.io/peloton/jobs/3883515 https://boards.greenhouse.io/peloton/jobs/3883515
      • xxpor 5y ago
        In addition, they'll have people come out and repair your bike if needed. Just shocked these days they didn't (completely) contract that out.
    • geodel 5y ago
      Well I initially thought they were premium 'white gloves' as compared to run of the mill bike/treadmill assembling white gloves.
• no_wizard 5y ago
  I think we’re starting to see a bit of “post pandemic” economic factors and that explains some of the shake up on Wall Street as of late. I always felt this about Peloton more than anything though, that it was not going to be able to sustain growth numbers as the pandemic when either of these came to pass: 1) ended officially 2) waned on to the point that it became "normalized" in how to handle day to day activities out Largely, I think some things that were popular in the pandemic got outsized growth through it, may fade in popularity quickly or outright be out of business as people want to resume more normal behaviors they had pre pandemic. I wonder how Zoom will fare. I think its more sticky than Peloton because everyone is transitioning to remote work for White Collar workers and I don't see that particular bit being given up quite so easily now, we shall see if thats the case over the coming months I think
  • scotuswroteus 5y ago
    Zoom will soon follow the rest of the silicon valley companies in finding ways to invest in military technology, use lobbying power to earn big dollar government contracts, and monetize its access to biometric data. Unless it has already done that.
    • Upgrayyed_U 5y ago
      Already there: https://www.zoomgov.com https://www.zoomgov.com Zoom for Government
      • ubermonkey 5y ago
        Which I'm utterly sure is in NO way more secure or less of a liability than regular Zoom. Zoom has proven itself to be completely craven about behavior and pseudo-apologies; I'm amazed they have any credibility with CIOs.
        • bladegash 5y ago
          It’s FedRAMP authorized at the moderate baseline. That requires implementation of a pretty sizable and stringent set of security controls, continuous monitoring, and more. I’d say it’s probably a bit more secure than their commercial offering, but that likely depends on your opinion of the control catalog’s requirements and compliance does not always equal secure.
• N_A_T_E 5y ago
  Is it just me or is $40 a month too much for the content they provide? I would spend a couple thousand on fancy exercise equipment, or maybe get one as a gift for my parents but the required subscription gives me rent seeking vibes.
  • sharkweek 5y ago
    My partner might as well have joined a cult with how obsessed she is with not just the peloton but the culture of the peloton class. That being said, she argues she’s never felt healthier in her entire life and so I can’t complain if she’s happy!
    • zaptrem 5y ago
      I've heard the same thing about "Peloton Culture" elsewhere, but not a good explanation of what that culture is. Can a HN Peloton user elaborate?
      • tannedNerd 5y ago
        The peloton subreddit is a good place to start. It’s easier to see it in the posts than explain it.
      • ohgodplsno 5y ago
        Take HN's hive mind tech bro culture, and apply it to overpriced classes that are basically a youtube video.
        • jmeister 5y ago
          If you have even the tiniest bit of curiosity, there are users, on this very page, describing how it’s much much more than a “YouTube video”.
          • geodel 5y ago
            Of course, It is more than a "Youtube video" who are part of Peloton cult. It would be rather normal if cult members never describe cult as "Oh it is just a typical cult with some suspicious ideology, providing dubious benefits and led by a charismatic charlatan"
• boringg 5y ago
  Apple should buy them - this would be an amazing asset for their health platform.
  • lotsofpulp 5y ago
    The profit seems to be in selling the recurring subscription to exercise videos and gamification, which Apple already offers. Seems like it would be smarter to let others take the hardware risks and have an API for other bike makers to plug into.
    • tombert 5y ago
      > The profit seems to be in selling the recurring subscription to exercise videos and gamification, which Apple already offers. Sure but they would inherit the memberships that Peloton has, and if they were smart about it they would do a gradual transition towards merging the platforms, similar to how they handled Beats music IIRC.
      • geodel 5y ago
        Huh, One more kid get wrangled/stuck in bike in some tragic accident and Apple would lose ten times more than Peloton ever lost. Besides endless memes about "Killer Apple" and so on. I guess Apple would prefer to stay dumb on this thing.
        • tombert 5y ago
          That's fair; I suppose Apple has traditionally stuck with "safe" electronics, as in stuff that is unlikely to be able to kill you. It's unlikely I'll be able to do anything with my iPhone that is likely to cause me any permanent harm, at least not accidentally.
        • boringg 5y ago
          I mean aren't they looking into driverless cars? Seems like has a much greater legal risk than anything peloton could ever present.
• the-alt-one 5y ago
  Makes sense, Peloton is a ridiculous product.
• tombert 5y ago
  I almost took a job with Peloton last year, since they made a pretty reasonable offer to me and I figure that working for an exercise company might inspire me to get into better shape. I'm pretty glad I didn't now.
• deleted 5y ago
  [deleted]
• muh_gradle 5y ago
  I applied to Peloton and was about to work there as a backend engineer for one of its departments that works with businesses and their HR departments. I'm very glad that I got away from all this. At the end of the day, this is a company that sells a piece of hardware with some pretty simple software on top. I was always baffled by the number of loyal consumers Peloton has, and found it delusional how the company kept labeling itself as a FAANG company.
  • stjohnswarts 5y ago
    As long as they make good quality products I think they'll always have a market, especially if they can hang on to their brand awareness, but the pandemic and bored people gave them a boost they won't be able to maintain forever.
• dkobia 5y ago
  Peloton has pretty expensive products and induces the same reaction folks had to iPhones before other companies released similarly priced flagships. Generally I think it's easy to hate on these products if you don't have one. I was pretty skeptical myself. "Was", because my partner picked up the Peloton Bike and subsequently the Peloton Tread. Like some other comments here, the almost cultish following is quite fascinating to witness in person. Would I get one myself -- probably not, but there's something to be said about the intensely passionate users Peloton has. This passion comes not from the hardware itself but from the trainers who've become celebrities themselves.
  • inlined 5y ago
    I’m a fairly new user. I stayed away because I never use my real bike, but a friend got one and said it was helping his air efficiency for scuba. I have to admit that this is unlike any workout machine I’ve had. Being totally silent is a big deal; I could watch Tv, take a call, or just generally feel less like I’m working. The classes are also a huge deal; I didn’t know my forms and I wouldn’t structure my own workouts to have the interval training they do. The leaderboards against both other students and my own personal PR push me every day (I just beat my last PR by 8%!). I really hope the company stays afloat. This has been the best I’ve adhered to a workout plan in almost a decade.
  • syshum 5y ago
    >>Peloton has pretty expensive products and induces the same reaction folks had to iPhones before other companies released similarly priced flagships. I think they both continue to generate the same reaction in many. They are both over priced products with users that are near cult like in their support of the company. If you are not part of that cult you view people in the cult as a little crazy
  • dehrmann 5y ago
    > Peloton has pretty expensive products You can buy a set of kettlebells up to 24kg, a barbell, and enough plates to make 315 lbs for the cost of a Peloton. Completely different crowd, though.
• thedougd 5y ago
  I agree with lots of the negative sentiment on Peloton, however, the name of the luxury game is to stay ahead of the pack and maintain a premium brand. Much of what they've done to date is maintain a huge catalog of real-time and recorded streaming classes and videos. I found the news about Peloton working with Google to use Stadia as a platform for gaming on Peloton devices, very interesting. So far, what we've seen from gamified exercise equipment has been cheesy, at best. Seems like there is opportunity there. On the other hand, it's a durable product and they should worry about market saturation.
  • nradov 5y ago
    Zwift has done well with a fitness gaming product oriented around bike races and challenges. But the graphics are cheesy. And the whole game experience is mostly just about power output in a straight line with maybe some drafting tactics; it only even supports steering in a very limited way.
    • mikestew 5y ago
      As a runner, I just do…not…get Zwift. I could see using it, maybe, on a bike (though, as parent points out, the bike version isn’t exactly all that). But running, it’s just watching a cartoon avatar run down the road while getting passed by bicycles. I well and fully admit that I could be missing the key element that makes Zwift a draw, but as I see it I’d do just as well to stare at the numbers on the treadmill’s LCD screen.
      • ubermonkey 5y ago
        I'm a cyclist, so I use Zwift to drive my trainer for workouts, and early in the pandemic I participated in some virtual racing. I won't say I love it, but I do think it's a valuable thing, and I'd miss it if it was gone. That said: I totally understand their desire to expand into running, but Zwift as an idea just seems so disconnected from the culture and practice of running that I'm not surprised it's not landing super well with at least some runners. Zwift is a cycling platform first, and it shows.
    • 5y ago
• pl0x 5y ago
  Did Peloton ever have a real business. They were competing with $200 bikes on Amazon and an iPad.
  • whywhywhywhy 5y ago
    > They were competing with $200 bikes on Amazon and an iPad Not really when they were selling a far more premium lifestyle experience. Peloton is an aspirational buy.
  • ubermonkey 5y ago
    Yeah, that wasn't their business. Their business was an aspirational service with interactive classes and a built-in community, all sold on a turnkey platform. That's distinct from "just a bike and an iPad."
  • geodel 5y ago
    It could be real business serving well off IT professionals like in FAANG+, or a slice of finance/legal/medical professionals. These folks can spend few hundred easily on fitness along with few thousand dollar devices. But if they want to scale to much larger then as you say they would be competing with 200 dollar bike + ipad. I'd think that just enticing people who could spend 400 dollars / month might be financially viable then reaching out to masses to justify 40 dollars per month on top of already expensive equipment.
  • uncertainrhymes 5y ago
    The bikes were secondary to them being a media company. I wouldn't be surprised if they sold those bikes at a loss. I am not in their club, but their instructors were celebrities with celebrity-sized followings. Even if people entirely stopped buying their bikes, they could be be acquired just for their content and brand.
  • kristjansson 5y ago
    To be fair, they're competing against ~$1000 stationary bikes, not the low end felt/friction stationary bikes.
• saran2win 5y ago
  The $40 subscription is the killer not enabling them to expand to mass market beyond the cult following. Not everyone needs a spin-class type contents and some just want to stream Netflix / HBO or just hear some good beats. If they need to expand their market beyond cult following, then they need to sell no-subscription options and focus on making the margin when selling the equipment.
  • Gortal278 5y ago
    They have 2.1million paying subscribers. I'd say it's more mainstream than cult.
• sAbakumoff 5y ago
  Laying off 2800(!!!) people sounds like they have too many people around. What are these people working on? I mean, Peloton just offers a couple of devices, and the content does not seem to be too advanced. Do you really need 2800+ people to do all of that?
  • fortuna86 5y ago
    Not everyone works in software. Movers, installers, retail workers, etc.
  • lern_too_spel 5y ago
    They were given money to expand their service offerings and hopefully make even more money. That means hiring more workers than needed to keep the lights on for their current services. This is just the market realizing the CEO got lucky with the first product and is unlikely to repeat it.
  • laluser 5y ago
    They need folks across a tall vertical in order to scale to the number of people that they have so quickly: hardware, software, logistics, brick and mortar stores, marketing, tons of content, etc. Easy to see how they can quickly balloon as demand outpaced their supply during covid.
  • missedthecue 5y ago
    Can you believe Groupon has 4,000+ employees and Doordash has a headcount of over 6,000?
• imwillofficial 5y ago
  I haven’t followed Peloton closely. How did they get so popular than crash so hard?
  • lbriner 5y ago
    The obvious answer is that lockdown made people more aware of their lack of exercise. Once lockdown starts to lift, people don't want it any more, they can go back to their gym instead. It is tough but this is def. a big problem with VC-backed companies who are always under pressure to make the most money whatever happens. Most of us would see 2800 layoffs as a failure but the VCs probably think it a success that they made the most of the market bubble and are now adjusting for a more realistic size/income.
• stjohnswarts 5y ago
  Sounds like their pandemic boom is over and the "right-sizing" has begun.
• deleted 5y ago
  [deleted]
• dcchambers 5y ago
  Peloton has a solid product, solid revenue, and a very devoted following. I think they will be fine as a medium sized company. The reality is they were just overvalued as a result of the pandemic. It should have been obvious to anyone that the insane user growth they had wasn't sustainable.
  • superultra 5y ago
    This right here. Had the pandemic never happened, Peloton would have grown more slowly and appropriately. Instead they were like no-face in Spirited Away; they just kept eating and eating and getting bigger and bigger. I don’t know why they did this because someone internal had to know this was a one time thing. Yet they acted like they could just power through and sustain growth through mere force of will.
• outworlder 5y ago
  > Barry McCarthy, who served as CFO at Spotify as well as at Netflix, will take over as CEO, the company said Tuesday. A bean counter at the helm? Ok, they are done.
  • curiousllama 5y ago
    To be fair, their failings were almost entirely a result of bad financial projections, resulting in an unstable balance sheet for an otherwise-solid business
    • vandorjw 5y ago
      Then why not keep the CEO, and replace the CFO? CEO needs to provide vision based on the financial projection from the CFO.
      • missedthecue 5y ago
        Because the buck doesn't stop at the CFO
        • joegahona 5y ago
          Will the CFO-turned-CEO hire another CFO? Two people at the helm who essentially do math all day doesn’t sound very inspiring.
          • refulgentis 5y ago
            That's an absurd representation of many things.
  • baby-yoda 5y ago
    tidying up the finances for an eventual acquisition. as far as shareholders are concerned, looking as good as possible on paper is priority #1.
  • WheatM 5y ago
• cbm-vic-20 5y ago
  Anecdotally, it appears that Zwift usage is still growing. It's more race and social oriented than Peleton, and less of a "spin class simulator", but it's only $15/mo and doesn't require as much of an up-front equipment investment. I think Peleton believed too much of their own BS and flew too close to the sun.
  • nradov 5y ago
    The Zwift up-front investment is only really lower if you already have some of the necessary pieces. But if you're starting from scratch and have to buy a bike, smart trainer, tablet / laptop, and stand then that can cost as much or more than a Peloton bike depending on how fancy you want to get.
    • latchkey 5y ago
      A bike that you can use outdoors too.
  • alfalfasprout 5y ago
    While I like Zwift it's not at all like Peloton. Yeah, it's more race oriented but also it's not as prescribed-- i.e you have to figure out what exactly you want to do for a workout. Also, a good Zwift setup will cost more than a Peloton. A reasonable road bike with an 11-speed cassette starts at ~$1k, then you'll need an extra cassette (~$100), smart bike trainer (~$1k), ipad or computer+tv (~$1k), etc. That said, a TacX Neo2T + Wahoo speed sensitive fan + TV is a fantastic combo.
  • r_klancer 5y ago
    Growing, yes, but from a much smaller base and probably with a lower ceiling. (I'm a regular Zwift rider in the winter.) Fundamentally, Zwift is for road cyclists who are training or stuck inside, and Peloton is for spin class fans, and never the twain shall meet. There's a big gulf between the two groups that is larger than it might seem to someone just casually observing that they appear to be doing almost exactly the same thing.
    • 5y ago
• m0ngr31 5y ago
  I interviewed there 6-7 months ago and made it to the offer stage, but I ended up taking another offer. Glad I made the right choice!
• notyourday 5y ago
  Look at the bright side - they still have ability to take classes from their favorite instructors for a year! Isn't that an amazing perk for being fired? P.S. I cannot wait to hear about what actually happened to the employee stock options.
  • smpetrey 5y ago
    > P.S. I cannot wait to hear about what actually happened to the employee stock options. No kidding. This might get really nasty.
• deleted 5y ago
  [deleted]
• 29athrowaway 5y ago
  Why I will never buy any Peloton product for my home... Peloton Tread+ Treadmill Safety Incident: https://www.youtube.com/watch?v=onXNnlCYJ4Y https://www.youtube.com/watch?v=onXNnlCYJ4Y (viewer discretion is advised)
  • capableweb 5y ago
    Just asking as I don't have a treadmill myself, how would any other brand of treadmills prevent this accident from happening? They have some fail-safes that this brand doesn't have?
    • 29athrowaway 5y ago
      Unlike most exercise equipment manufacturers, Peloton advertises their products as products built specifically for the home. After the safety recall, Peloton introduced various changes to their products.
• radicaldreamer 5y ago
  The issue with Peloton is not that the pandemic is ending, people are going to gyms again etc. but their failure to evolve the product. It was innovate when first launched but their half fitness-half entertainment focus has left them unable to do either effectively. Competitors have taken a much more serious approach to fitness and have a better product or have focused mostly on casual fitness (Apple Fitness) and have a more polished end user experience.
  • kilbuz 5y ago
    Do you think they also are running out of new customers in the luxury home gym market?
    • alfalfasprout 5y ago
      I mean, not really. Gyms are open in many cities but people that built home gyms are still actively using them.
  • kodah 5y ago
    I thought about getting a Peloton because I like to bike every day, but it gets a bit cold for me to do so. The deal breaker on Peloton for me was that they locked down their platform. I couldn't install Zoom or any other apps that I wanted, I had zero control over the camera, etc... I really wanted to do PR/Code review on my bike, but if I can't even install Zoom then that's definitely a no-go. Why was any of this necessary on an exercise bike that is otherwise great quality?
• loudtieblahblah 5y ago
  I feel for the workers.. But I always gloat when luxury brands based more of trendy shit than anything practical, start to tank.
• jker 5y ago
  Somewhat related: a miniature version of the Peloton model is Supernatural, which I run on the Oculus Quest 2. (https://www.oculus.com/experiences/quest/1830168170427369/ https://www.oculus.com/experiences/quest/1830168170427369/). It's about $20 a month and absolutely worth it, the workouts are fun, challenging, motivational and musical. It's been transformative for my fitness. (I am not affiliated with these companies.)
  • bbarn 5y ago
    My wife got the quest 2 and initially loved it when we were on vacation back to the US at xmas. Come back here to Europe and found it's geofenced with no likelyhood of ever coming because it uses royalty based songs.
• throw8383833jj 5y ago
  strictly speaking as a consumer, I would rather ride an old scrappy bicycle in the great outdoors, rather than an in-door bicycle that costs 2000$ and 40$/month. I was rather surprised to see it go on as long as it did.
  • thehappypm 5y ago
    There’s a layer of ice on all the roads right now outside.
    • bagacrap 5y ago
      perfect, that'll keep the motorists at home!
      • thehappypm 5y ago
        Some people might see it that way, but most people see ice on the roads and really narrow shoulders as a literally deadly risk to biking outdoors. There might be some hardos that’ll still bike in these conditions, but for the other 95% of people who want to get some bike exercise, indoors is the way to go.
• dmode 5y ago
  The absolute bloodbath of VC funded companies with weak fundamentals is finally catching up. Peloton, Robinhood, WeWork, Opendoor, Clover health, and countless others with major layoffs, stock down 60-80%, no profitability or sustainable business model in sight. My back of the envelope calculation suggests that over the last decade $200-300bn has been spent by VCs on startups, led by Softbank. And with very little to show for it. 95% of tech revenue, profit, and market cap is dominated by MSFT, Apple, Google, Facebook, and Amazon - companies that took very little to no VC funds. Just makes me ask what a world with little VC influence will look like. Will most likely be more resolute companies and founders building more sustainable businesses who take on this big 5.
  • paxys 5y ago
    There is no "finally". VC-funded companies fail all the time. In fact most of them are expected to fail. You can find similar misses every year stretching back to the start of the industry. Similarly, there are companies which have gone public over the last year with spectacular businesses and sky-high valuations. And heck Peloton is still valued at $12B+. The VCs are all fine.
• etempleton 5y ago
  A lot of people love their Peloton bikes and the associated service, but all I could think about when Wallstreet was hyping them is how big, really, can the premium exercise market be? And further, the exercise market is a fad market. Nothing sticks around for more than a few years, maybe a decade. Anyone remember CrossFit? P90X? Richard Simons? BowFlex? Yes, Peloton will be around for awhile, but the growth was never sustainable. I think it is strange anyone thought it would be.