Peloton raises prices again for its Bike+ and Tread fitness equipment

It's been a brutal year for Peloton and the company is making bigger changes in an effort to get back on track. On the consumer side, Peloton is reversing price cuts on two of its top fitness equipment. The Bike+ goes up from $1,995 to $2,495 in the US.

The Tread, meanwhile, will be more expensive than before Peloton cut prices in April to focus on subscription revenue. The Tread will rise $800 in the US to $3,495. At the beginning of this year, the machine cost $2,895. The company is also increasing product prices in Canada, the United Kingdom, Germany and Australia.

Lowering the price in the first place "at least weakened brand perception," CEO Barry McCarthy told Bloomberg. "So it's a return to historical positioning." He added that "I probably wouldn't have messed with the prices at all if I had been faced with different inventory states when we lowered the prices." The company is not changing the price of the original bike or the Peloton Guide system at this time.

Meanwhile, in its third round of public layoffs this year, Peloton is cutting another 784 jobs in its distribution and customer service teams. It will close 16 warehouses in North America and only use third-party companies for deliveries and installation of equipment in homes. The cessation of internal distribution and the closure of warehouses will lead to the loss of 532 jobs.

The company will also use third parties to bolster its customer support team, which will be cut by about half with the loss of 252 positions. These job cuts come on top of the roughly 570 employees Peloton laid off in Taiwan last month as it moves away from in-house manufacturing. In February, Peloton cut about 2,800 jobs and named McCarthy as its new CEO. However, the company still plans to hire in certain areas, such as software development.

On top of all that, Peloton plans to start closing its showrooms next year. It remains to be seen how many will be closed, although it operates 86 in the United States and Canada. The company will require office workers to return to its offices from November.

McCarthy told employees in a memo (which was provided to Bloomberg) that changes were needed to help get the company's cash flow positive again. "We need to get our income to stop declining and start growing again," he wrote. "Money is oxygen. Oxygen is life."

Peloton posted a huge loss of $757.1 million for the first three months of 2022 due to lower revenues and soaring operating costs. It experienced a major business boom shortly after the onset of the COVID-19 pandemic. However, he believed demand would continue after the planet reopened and he built too many units of his fitness equipment before slowing production earlier this year.

We will soon have a clearer picture of the current state of the company. Peloton will release its results for the April-June quarter (the fourth quarter of its fiscal year) on August 25.

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