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Business
on the money

Peloton scrambles to soothe analysts after Wall Street Journal report on layoffs: sources

By
Lydia Moynihan
Published Oct. 6, 2022
Updated Oct. 6, 2022, 4:18 p.m. ET

Peloton executives made a frantic round of phone calls to stock analysts early Thursday, scrambling to soothe concerns after the Wall Street Journal reported that the company has “six months to prove it can survive on its own,” sources told On the Money.

The paper’s report, published shortly after 7 a.m. Thursday, said Peloton is concerned whether it can stand on its own feet as it lays off another 500 employees, or 12% of its remaining workforce, in a bid to reverse losses. While the company isn’t disputing the firings, Peloton executives told analysts that comments that CEO Barry McCarthy made in an interview were “mischaracterized” by the paper.

Specifically, the Peloton executives insisted that The Journal overdramatized McCarthy’s comments — and claimed that the CEO never said the company had “six months.” Peloton executives likewise claimed McCarthy is a “true believer” who is optimistic about company’s future and confident the job cuts will work, sources said.

Barry McCarthy
Barry McCarthy joined Peloton earlier this year. Getty Images

The Journal ended its report on a cheery note — with a quote from McCarthy that said, “I can see in the numbers the business starting to change course… which is part of what gives me confidence when I say that I think this is the last step in the process.”

Nevertheless, Peloton execs griped that the upbeat quote got buried at the end, sources said.

The damage-control operation — a series of strategically placed calls to big banks like Morgan Stanley and JPMorgan that got launched before the opening of trading — appeared to work. Peloton shares initially spiked as much as 6% to $9 despite the Journal’s report that the job cuts were a “last bid for a turnaround.”

The stock closed at $8.83, up 4%. Peloton shares have plummeted nearly 90% over the past year as it grapples with losses amid slackening demand for home-exercise equipment as the pandemic wanes.

People walk past a Peloton store on January 20, 2022 in Coral Gables, Florida.
Peloton executives are telling analysts the WSJ report was unfair. Getty Images

Peloton didn’t return calls seeking comment. A spokesperson for the Journal, which shares a common owner with The New York Post, didn’t immediately respond to requests for comment.