Peloton halts production of its bikes, treadmills as consumer demand wanes

Peloton is temporarily halting production of its connected fitness products as consumer demand wanes and the company looks to control costs, CNBC reports, citing “internal documents.” The company said in a confidential presentation dated January 10th that demand for its connected fitness equipment has faced a “significant reduction” worldwide due to consumers’ price sensitivity and increased competitor activity.

SharePlay works with Apple Fitness+ so users can work out or meditate together while on a FaceTime call.
SharePlay works with Apple Fitness+ so users can work out or meditate together while on a FaceTime call.

Lauren Thomas for CNBC:

Peloton plans to pause Bike production for two months, from February to March, the documents show. It already halted production of its more expensive Bike+ in December and will do so until June. It won’t manufacture its Tread treadmill machine for six weeks, beginning next month. And it doesn’t anticipate producing any Tread+ machines in fiscal 2022, according to the documents.

Peloton has essentially guessed wrong about how many people would be buying its products, after so much demand was pulled forward during the coronavirus pandemic. It’s now left with thousands of cycles and treadmills sitting in warehouses or on cargo ships, and it needs to reset its inventory levels.

The planned production halt comes as close to $40 billion has been shaved off of Peloton’s market cap over the past year. Its market value hit a high of nearly $50 billion last January.

Peloton shares closed Thursday down 23.9% at $24.22, bringing the stock’s market value to $7.9 billion.

CNBC reported on Tuesday that Peloton is working with consulting firm McKinsey & Co. to look for ways to slash costs, which could entail job cuts and store closures. A person familiar with the matter said Peloton has already started layoffs in its sales division.

MacDailyNews Take: Apple Fitness+, killer.

See also: Apple Fitness+ is killing Peloton – December 29, 2021

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    1. It does cost a lot but a lot people use/used it.
      IMHO Peloton is partly a victim of the pandemic. It got massive unexpected quick expansion and the business operations grew rapidly to accommodate it. Yet much of it was an illusion that likely would fade. It’s an expensive fitness solution that would sell to a specific audience. Hey, lots of people use Peloton prior to 2020 and it probably was a business that could be profitable on that trajectory. And provided it can transition back to that without too much financial upheavalturmoil, they should be alright. But the debt load they likely took on to grow the business rapidly could make a downward transition problematic (and an eventual target of a discount buyout).

  1. If I ever see another one of those damn commercials…it will be too soon. It’s no surprise…exercise is not required these days. Just lie on the couch, eat junk and get fat. The government will take care of you.

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