Peloton Slashes Marketing Costs Again as Part of Restructuring

Published 9 hours agoPTON

Peloton Slashes Marketing Costs Again as Part of Restructuring

Peloton is doubling down on its efforts to reach profitability by slashing its marketing expenses for the fourth consecutive quarter. The company has been aggressively implementing cost-saving measures, including an 18.5% reduction in sales and marketing expenses year-over-year, bringing them down to $112 million in the fourth quarter of fiscal 2024. This move is part of a broader restructuring initiative announced in May 2024, aimed at reducing annual expenses by over $200 million by the end of fiscal 2025 through various means, including cutting 400 jobs globally.

Despite these cuts, Peloton managed a marginal 0.2% increase in revenue for the fourth quarter, the first sales uptick in nine quarters, as reported by Reuters. However, the company anticipates a decline in connected fitness subscribers for the upcoming fiscal year, with projections falling short of analysts' expectations. This projection could pose a challenge as Peloton strives to maintain momentum in an increasingly competitive fitness market.

The changes at Peloton are not limited to cost reductions; the company is also undergoing leadership transformations. After CEO Barry McCarthy's departure in May 2024, interim co-CEOs Karen Boone and Chris Bruzzo have taken the reins while the company searches for a permanent replacement. Investors have reacted optimistically to Peloton's restructuring efforts, with shares spiking 28% following the announcement, though recent trading saw a minor decrease in stock price, sitting at $6.51 at last check.

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