August 12 (Reuters) – Peloton Interactive (PTON.O) On Friday, it said it would cut jobs, close stores and raise prices for its gym equipment including treadmills and high-quality bikes while it conducts a company-wide revamp to shore up its revenue and improve cash flow.
Shares of the company rose about 11% in afternoon trading after the company said in a note that it would cut about 800 jobs and reduce its retail presence in North America.
Under CEO Barry McCarthy, Peloton has implemented a slew of measures including cost cuts to stabilize its business as pandemic-driven demand for treadmills and exercise bikes is fading fast.
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On Friday, the company outlined a plan to aggressively reduce its retail presence in the United States and cut a number of jobs in its warehouse and customer support teams.
In the note seen by Reuters, McCarthy said that shifting final delivery to third-party logistics providers would reduce delivery costs for each product by up to 50%.
The company is also raising prices for its Bike+ and Tread machines in five markets, including the United States and Canada. (https://bit.ly/3peZhNv)
The company, which lowered prices for its products earlier this year, said it will now raise prices by $500 to $2,495 on Bike+ and $800 to $3,495 on Tread in the US.
McCarthy, ex-Netflix (NFLX.O) One CEO, said he was aiming to bolster the software engineering team at Peloton, calling it “appropriate investments” to drive growth.
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Additional reporting by Nathan Gomez and Kanaki Deka in Bengaluru; Additional reporting by Deborah Sophia. Editing by Krishna Chandra Elori and Anil de Silva
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