Peloton is laying off more than 2,800 employees in a restructuring plan — but its instructors are safe.
The layoffs were announced on Tuesday on the back of falling demand for Peloton’s home-fitness products as pandemic restrictions ease. The job cuts started on the same day.
Peloton will be offering a “meaningful cash severance allotment” and extending equity-vesting periods for those laid off. It is also offering them a free one-year Peloton subscription, according to a message from company cofounder John Foley posted on its website.
Not all employees are affected. “Peloton’s roster of instructors and breadth and depth of its content will not be impacted by the initiatives announced today,” the company said in its Tuesday news release.
The retention of instructors appears to be in line with Peloton’s new business model. The new direction puts instructors at the heart of the company, Bloomberg reported in January.
Some Peloton instructors have obtained celebrity status with huge followings. Robin Arzon, the head instructor, has almost 1 million Instagram followers. Meanwhile, her fellow instructor Cody Rigsby, who was the second runner-up in “Dancing With the Stars” last year, has garnered 1 million Instagram followers. The two, alongside Ally Love, have a collaboration with the sportswear giant Adidas.
Peloton’s instructors — recruited by talent agents — are full-time employees with a fixed salary and incentive compensation, according to Bloomberg. Senior instructors are paid more than $500,000 a year, Bloomberg reported, citing people familiar with the company. That’s about 12 times more than the $40,510 annual median salary for fitness trainers and instructors, according to the Bureau of Labor Statistics.
Here are 55 instructors listed on Peloton’s website. They lead a variety of classes, from biking to yoga.
Peloton‘s job cuts amount to about 20% of its 14,000-person corporate workforce. The cuts are expected to contribute to savings of at least $800 million a year, the company said in its news release. It’s also winding down the building of a $400 million factory in Ohio, where it had planned to produce bikes and treadmills.
As part of the shake-up, cofounder Foley is stepping down as CEO and will become the executive chair, Peloton said. The company is tapping Barry McCarthy, a former chief financial officer at Spotify and Netflix, to head the company.
Peloton did not immediately reply to Insider’s request for comment.
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