Peloton (NASDAQ:PTON) watched its shares go up Friday, after the company said it’s resetting its production levels and considering layoffs in order to make its business more "flexible."
CEO John Foley sent a memo to workers late Thursday that was also posted publicly, after media reports that Peloton was temporarily halting production of its cycles and treadmills. Other reports stated on Tuesday that Peloton has been working with McKinsey & Co. to look for areas to cut costs.
"We’ve found ourselves in the middle of a once-in-a-hundred-year event with the COVID-19 pandemic, and what we anticipated would happen over the course of three years happened in months during 2020, and into 2021," said Foley, in the memo.
He said rumors that the company is halting "all production" are false.
Certain media obtained documents outlining a plan at Peloton to pause Bike production for two months, from February to March. The documents suggest it already halted production of its more expensive Bike+ in December and will do so until June.
Under the plan, Peloton wouldn’t manufacture its Tread treadmill machine for six weeks, beginning next month. And it would not produce any Tread+ machines in fiscal 2022. Peloton had previously halted Tread+ production after a safety recall last year.
On Thursday evening, Peloton pre-announced its financial results for the three-month period ended Dec. 31 and said it sees revenue coming in a previously forecasted range. However, the company added fewer subscribers in the latest period, than it had expected.
PTON shares regrouped $1.11, or 4.6%, to $25.33.
