Peloton fires nearly 3000 staff, some by removing Slack access
As a parting gesture, Peloton told the former employees they would get a “meaningful” severance package, which included a free Peloton membership — for one year, valued at $468.
Almost 3000 staff at embattled fitness company Peloton woke up this morning without a job, with some terminated employees only finding out they’d got the sack when they couldn’t get into their work messaging platform.
The 2800 jobs cut on Tuesday made up a whopping 20% of roles in the New York City company, but none of the company’s instructors — who lead the interactive cycling classes for Peloton — were thought to be part of the mass bloodletting.
CNBC journalist Lauren Thomas says she was “receiving many messages from (now former) Peloton employees who learned they were being let go because the company turned their Slack access off.”
As a parting gesture that is sure to elicit some less-than-favourable responses, Peloton told the 2800 former employees they would get a “meaningful” severance package, which included a free Peloton membership — for one year, valued at $468.
Under a section of the goodbye memo titled “Taking care of our team”, co-founder John Foley said the company was “equipping every team member leaving Peloton with helpful tools to make them as comfortable as possible as they explore their career path post-Peloton”.
He also offered career services, extended equity vesting periods until the end of February, a “meaningful” cash severance which was not disclosed in the open letter and healthcare benefits “for a period of time”.
Foley has also stepped down as chief executive of Peloton, a role he had held since he came up with the idea for the interactive exercise bike in 2011.
“We own it. I own it and we are holding ourselves accountable,” Foley said. “That starts today.”
However, Foley remains with Peloton as the executive chair.
Foley’s wife also got the chop and will also be stepping down from her role as vice president of apparel in the coming months, “amongst a number of other senior-level departures across various areas of the business that you’ll learn in the coming days”, Foley wrote.
Some are saying it’s nothing out of the ordinary for a ruthless company that last year fought a request from the Consumer Product Safety Commission (CPSC) to recall its Tread Plus treadmill, which was involved in the death of a child.
Last December, while Peloton’s stocks plummeted 75%, Foley bought a US$55 million ($77 million) house in the Hamptons and hosted an invite-only holiday party for Peloton instructors, though the company had cancelled a company-wide event and frozen hiring.
Peloton has taken a beating after peaking early in pandemic as homebound consumers turned to the bikes to stay in shape, but sales has since turned to a trickle with the stock falling 80% in 12 months.
Unfavourable representations in hit TV shows added to the companies woes — Sex and the City reboot And Just Like That… killed off main character Mr Big with a post-Peloton heart attack — then Billion’s Mike “Wags” Wagner suffering a similar ailment, though Wagner lived to tell the tale.
Last month reports surfaced revealing Peloton had temporarily ceased production of its bikes and treadmills, and the company then reportedly put off opening its new factory in Ohio, though Foley vehemently denied both.
Foley will be replaced by incoming CEO Barry McCarthy who recently served as CFO of Spotify and Netflix.
