Peloton Shares Climb Premarket After Announcing Production Reset and Job Cuts
Jan 21, 2022 By MarketDepth
Peloton (NASDAQ: PTON) shares rose over 5% during premarket trading Friday after it announced that it would be resetting production levels and considering cutting jobs as a means of becoming more “flexible.” The news comes after a report that it had stopped manufacturing bikes and treadmills, which sent shares plummeting.
CEO Denouncing Rumous
Nevertheless, Peloton CEO John Foley released a statement saying that the “rumors that we are halting all production of bikes and Treads” were “false.”
Analyzing Division Cost Cuts
CNBC reported that Peloton has been working with McKinsey & Co. to analyze which divisions could cut costs. Furthermore, Foley sent a memo to workers on Thursday, which was publicly displayed.
“We’ve found ourselves in the middle of a once-in-a-hundred-year event with the COVID-19 pandemic, and what we anticipated would happen over the course of three years happened in months during 2020, and into 2021.”Peloton CEO, John Foley
“We feel good about right-sizing our production, and, as we evolve to more seasonal demand curves, we are resetting our production levels for sustainable growth,” he added.
Considering All Options
According to Foley, the potential layoffs will depend on the company’s organizational structure and the size of its team, which is being evaluated. “We are still in the process of considering all options as part of our efforts to make our business more flexible,” he wrote.