Exercise bike maker Peloton has set out plans to hike its prices, cut costs, and force its staff back into the office, as it seeks to turnaround after demand for its home gym equipment dipped following the lifting of Covid-19 restrictions.
In an internal memo published by Bloomberg, the New York headquartered running machine seller set out plans to increase its prices, outsource its delivery operations, and push its staff back into the office.
Peloton workers will also be expected to come back into the office on Tuesdays, Wednesday, and Thursdays each week from 6 September onwards, the memo says, as it espouses the benefits of “hands-on, shoulder-to-shoulder collaboration”.
The memo says the return to the office will be “mandatory” as it suggests those who fail to return may be forced to leave.
“For those of you who don’t want to return to the office, we respect your choice. We hope you choose to stay, but we understand not everyone will,” the Peloton memo says.
In seeking to reverse its dipping revenues, Peloton also said it plans to increase the price of its Bike+ exercise bike by $500 (£412) to $2,495, and hike the price of its Tread treadmill by $800 to $3,495, in its efforts to capture a larger share of the “premium” market.
The memo says the prices of Peloton’s basic Bike V1 and Tread machines will remain the same with a view to offering an “attractive entry point for new members.”
The firm, which manufacturers internet connected exercise equipment that offer users the option of joining remote exercise classes for a monthly fee, also set out plans to outsource its delivery operations.
The move to outsource its delivery and logistics operations will see it cut almost 800 jobs and close warehouses in North America.
The Peloton memo says that outsourcing its logistics operations will reduce its delivery costs by around 50 per cent.
The new measures come as part of newly appointed chief executive Barry McCarthy’s shakeup of the firm, after he took up his role as head of the exercise machine maker in February.
Peloton is hoping to turnaround its fortunes after revenues began to plummet over the previous year due to the return to offices.
Peloton has been approached for comment.