Peloton is cutting another 500 workers, accounting for roughly 12 per cent of its workforce, with the CEO giving the company another six months to correct course.

Chief Executive Barry McCarthy, who took over in February and has embarked on fierce cost cutting measures since, made the incendiary comments to the Wall Street Journal.

“There comes a point in time when we’ve either been successful or we have not,” McCarthy told WSJ, adding that point will be in about six months.

The story continues:

“If we don’t grow,” he said, before pausing. “We need to grow to get the business to a sustainable level.”

Not surprisingly, shortly after the article’s publication on Thursday morning EDT, Peloton executives “made a frantic round of phone calls to stock analysts”, assuring them that McCarthy’s brash comments were “mischaracterised”.

McCarthy also wrote a note to employees after the WSJ article went live.

“There is no ticking clock on our performance and even if there was, the business is performing well and making steady progress toward our year-end goal of break-even cash flow,” he wrote.

McCarthy later went further, and released a retraction of sorts:

“I joined Peloton for the comeback story, not to sell the business. And today the business is fundamentally more sound than ever and on the right path, so to be clear, there is no timeclock nipping at our heels. If my comments to the WSJ suggested otherwise, then I misspoke, as that is simply not true.

“Restructuring a business requires difficult decisions that affect people’s lives. I’m grateful for the many contributions of those who have been impacted. The changes we have made, combined with the performance of the business, are moving us closer to our fiscal year-end goal of break-even cash flow, with a renewed focus on growth.

“We are in the business of driving performance, and the business is indeed performing. By any measure, we have made remarkable progress in record time.”

 

 

 

He also apologised for the latest round of cuts, although this was done in an internal memo.

“I know many of you will feel angry, frustrated, and emotionally drained by today’s news, but please know this is a necessary step if we are going to save Peloton, and we are.”

Peloton cut 2,800 jobs in February, including that of the former CEO and co-founder John Foley. Another 500 manufacturing jobs were cut in July, when the company announced it would halt all in-house manufacturing.

In August a further 530 employees were cut from North American delivery teams, and 250 from customer-service jobs.

A further 600 jobs have also been cut since the end of June, due to downsizing of various activities.

Peloton lost A$1.87 billion during the most recent quarter, its sixth straight quarterly loss. Shares are down 95 per cent since the company’s December 2020 high of US$160.

It’s going to be a tough road ahead for McCarthy if he wishes to steer the company back on track.