- Peloton execs considered laying off 41% of the sales and marketing teams in audio heard by Insider.
- In the recording, executives noted that there are 15 retail stores “on the cut line.”
- Execs also said they can start by “stripping out low performers” in e-commerce.
Things haven’t been going well for Peloton lately. After making headlines for plummeting stock prices and poor product placement in HBO’s “Sex and the City” spinoff, the firm has struggled to bounce back.
In an audio recording obtained by Insider, some of Peloton’s top executives discussed plans to lay off 41% of the sales and marketing teams, with more minor cuts coming to the e-commerce and retail teams. The company has hired consulting firm McKinsey to help swing the ax, as previously reported by CNBC.
While execs on the call seemed to agree on the 41% cuts, it’s unclear if Peloton will actually use this exact percentage during any upcoming layoffs.
Peloton thrived early in the COVID-19 pandemic, with its internet-connected stationary bikes exploding in popularity as people looked for ways to keep busy during lockdowns. Insider previously reported that CEO John Foley said the company’s rush to hire to meet the pandemic surge in demand made the company “a little undisciplined.”
Since then, the company created “Project Fuel” to optimize its spending and create a layoff strategy, a source familiar with the matter told Insider.
In the recording of a Project Fuel meeting, executives talked about which sales and marketing teams will bear the majority of the cuts. They also noted there are 15 retail stores on “the cut line.”
Execs also discussed smaller cuts to its e-commerce department, using a recent talent review as a way of trimming head count. “We can make it pretty easy by just stripping out low performers,” one executive said.
In the audio, leaders also discussed reducing head count through eliminating redundancies, such as reducing staff from five regional managers to four, giving sales calls to retail employees, and eliminating some roles with overlapping skill sets.
One executive added that they can see the firm “ripping out” roughly 30% of inside salespeople.
Later in the call, execs talk about possibly cutting Peloton’s e-commerce staff by using “off-the-shelf” — or not custom-made — merchandise.
“We’ve done too much stuff in-house,” one exec said to laughter. “We have a lot of unforced errors.”
As the call continued, execs complained that the company’s app fails to convert sales from users. “The app is such an underutilized tool for us right now in this,” said an exec. “Our app is terrible.”
Execs also discussed who else in the company should be brought up to speed on planned layoffs and who should meet with the McKinsey consultants, who appear to be helping identify where to make cuts.
When it comes to firing employees, executives on the call agreed that they had to “spread out” layoffs, rather than only taking out mid-level and lower-level employees.
Insider reported on the blowback from Black employees who criticized the firm for paying well below the market rate for many low- and mid-level positions at the company. The company promised higher compensation through stock, which is trading at roughly $30 as of January 18, after plunging from its high of $171.09.
Peloton did not immediately return a request for comment.