Peloton will cut jobs, close stores and raise prices in a company-wide revamp

August 12 (Reuters) – Peloton Interactive (PTON.O) On Friday, it said it would cut jobs, close stores and raise prices for its gym equipment including treadmills and high-quality bikes while it conducts a company-wide refurbishment to shore up its revenue and improve cash flow.

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

Under CEO Barry McCarthy, Peloton has implemented a slew of measures including cost cuts to stabilize its business as pandemic-driven demand for treadmills and exercise bikes is fading fast.

On Friday, the company outlined a plan to aggressively reduce its retail presence in the United States and cut a number of jobs in its warehouse and customer support teams.

In the note seen by Reuters, McCarthy said that shifting final delivery to third-party logistics providers would reduce delivery costs for each product by up to 50%.

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

The company, which lowered prices for its products earlier this year, said it will now raise prices by $500 to $2,495 on Bike+ and $800 to $3,495 on Tread in the US.

McCarthy, former Netflix company (NFLX.O) One CEO, said he was aiming to bolster the software engineering team at Peloton, calling it “appropriate investments” to drive growth.

(1 dollar = 1.2782 Canadian dollars)

Additional reporting by Nathan Gomez and Kanaki Deka in Bengaluru; Additional reporting by Deborah Sophia. Editing by Krishna Chandra Elori and Anil de Silva

Our criteria: Thomson Reuters Trust Principles.