Just over 50 Phoenix-area workers appear to be among the 2,800 layoffs that exercise equipment manufacturer Peloton announced Tuesday.
The move comes six months after the company that makes popular stationary bicycles, treadmills and other fitness equipment announced it would hire 350 workers to open a member support center in Tempe.
Peloton filed a notice with Arizona on Wednesday indicating that 52 employees in Maricopa County were affected. Federal labor laws require companies with 100 or more employees to notify the state workforce development agency of plant closings and mass layoffs.
The layoff notice filed with the state didn’t indicate where in the county the employees worked. The company has a showroom at Scottsdale Fashion Square and an online search shows a Peloton warehouse in Phoenix. It’s unclear if the company had hired the full 350 workers it expected to at its Tempe center, although city officials said it opened and made hires last fall.
Peloton declined to comment on local impacts and referred The Arizona Republic to a statement issued Tuesday announcing the company’s plans.
The layoffs also impacted approximately 20% of Peloton’s corporate staff in New York, and co-founder John Foley is stepping down as chief executive.
The restructuring is expected to save at least $800 million annually once implemented, the Associated Press reported.
The company had seen demand dramatically increase at the start of the pandemic and then fall as gyms reopened.
Company shares on a roller-coaster ride
Peloton and other at-home fitness companies saw demand grow during the first 18 months of the pandemic as COVID-19 closed gyms and people turned to home workouts and the outdoors for exercise. Health and fitness equipment revenue more than doubled to $2.3 billion from March to October 2020 and sales of treadmills and stationary bikes took off, leading to supply shortages, according to the Washington Post.
Demand for Peloton equipment in 2020 led the company’s revenues and stocks to skyrocket. The company reported earning $758 million in revenue in the spring and summer, a 232% increase from the same period the year before, and its stock went up more than 400% in 2020, the Post reported.
The growth led the company to expand its manufacturing operations and open a call center near the Loop 101 and Loop 202 interchange in Tempe.
The company in August announced it would move into a 50,000-square-foot building and hire member support employees to answer customer questions or help solve issues with their services or equipment. Sales, information technology, operations support and human resources-type positions were expected to be housed at the site.
But the company’s stock has since tumbled. Nearly all of the gains in 2020 were wiped out in 2021 as vaccines sent people back out to gyms, according to AP.
The stock fell even further in January after reports the company would cut back on production as sales declined. That prompted speculation of potential takeover bids by Amazon and Nike.
Foley, the co-founder, said workforce cuts and other efforts would help rightsize the company and bring stability to Peloton.
“Peloton is at an important juncture, and we are taking decisive steps,” Foley said in a statement. “Our focus is on building on the already amazing Peloton Member experience, while optimizing our organization to deliver profitable growth.”
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This article originally appeared on Arizona Republic: Peloton lays off 52 metro Phoenix employees as company restructures