Peloton instructors spared from job cuts as company eliminates 2,800 global roles
Peloton says its instructors and fitness classes won’t be impacted by its ‘restructuring program’
Peloton instructors are being spared from the fitness company’s job cutback and "restructuring program," which is expected to result in around $130 million in severance payouts and other exit activities to approximately 2,800 employees around the world.
In a news release published for investors on Tuesday, Peloton announced that it will "right-size the organization by enacting a workforce reduction."
The reduction will reportedly "occur across nearly all business operations to streamline reporting structures and create clearer lines of accountability," including an approximate 20% cut in corporate positions and an intentional downsize of owned and operated warehouses and delivery teams in favor of working with third-party logistics providers.
"Peloton's roster of instructors and breadth and depth of its content will not be impacted by the initiatives announced today," the fitness tech company wrote.
PELOTON REMOVES CEO JOHN FOLEY, SLASHES SALES OUTLOOK, JOB CUTS PLANNED
Peloton, which experienced high demand during the initial COVID-19 lockdowns with its exercise bikes, treadmills and digital fitness classes, has 54 instructors and one guest instructor listed on its website.
Currently, Peloton’s roster of instructors are training fitness enthusiasts in bike, tread and yoga.
FOX Business reached out to Peloton about instructor salaries, but the company declined to comment.
A representative for Peloton instead shared a statement from the company’s Q2 2022 Shareholder Letter, which says "operational restructuring will not negatively impact our instructor roster, number of classes produced, or range of class modalities."
PELOTON'S POTENTIAL SUITORS: AMAZON, NIKE, APPLE, DISNEY OR SONY?
Interviews provided by Peloton instructors before the company hit growth struggles seem to show the company's arsenal of fitness instructors is generously compensated. For example, a 2019 article from The Wall Street Journal that profiled Peloton instructor Jess Sims reported that she claimed to have made "six figures with stock options."
"[Peloton is] easily the best job you could have as a fitness instructor because we are treated like professional athletes," Sims told The WSJ at the time. "We get paid time off. We go to physical therapy every single week to prevent injuries."
Median salaries for fitness trainers and instructors throughout the U.S. are $40,510 per year or $19.48 per hour, according to data published by the Bureau of Labor Statistics.
Customers who own Peloton equipment can still work out with instructors during livestreams or searching through Peloton’s on-demand class archive if they maintain their monthly $39 Peloton All-Access Membership while customers who don’t own Peloton equipment can get access to classes if they maintain their monthly $12.99 Peloton App Membership.
PELOTON RESURFACES AGE-POSITIVE AD AMID RECENT CONTROVERSIES
Peloton also expects to pay "$80 million in non-cash charges" related to its restructuring program layoffs.
The company is hopeful that its restructuring program will result in "at least $800 million of annual run-rate cost savings through operating expense efficiencies and significant margin improvement in its Connected Fitness category" once it’s fully implemented.
"These decisions, particularly those related to our impacted Peloton team members, were not taken lightly," said John Foley, Peloton’s co-founder and newly appointed executive chair, in a statement. "We greatly value the contributions of our talented colleagues and are committed to supporting impacted team members in their transitions. We thank our global team members for their focus and dedication through this process."
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Peloton went public on the NASDAQ on Sept. 26, 2019, and saw a surge of growth when the COVID-19 pandemic resulted in lockdowns that closed gyms around the nation.
As the country has gradually reopened despite the pandemic’s persistence, fitness customers are returning to gyms and wellness centers for in-person classes or have found other at-home or outdoor workout opportunities. The shift in demand has resulted in a significant decline in Peloton sales and has reportedly led the company to temporarily halt production for its workout equipment, though Foley denied the warehouse rumor in January.
CLICK HERE TO READ MORE ON FOX BUSINESS
"Peloton is at an important juncture, and we are taking decisive steps," Foley said in Pelton’s Feb. 8 news release. "Our focus is on building on the already amazing Peloton Member experience, while optimizing our organization to deliver profitable growth."
He continued, "With today's announcements, we are taking action to ensure Peloton capitalizes on the large, long-term Connected Fitness opportunity. This restructuring program is the result of diligent planning to address key areas of the business and realign our operations so that we can execute against our growth opportunity with efficiency and discipline."