Peloton Is Scrapping Plans to Build Its Own Factory

  • Peloton is scrapping plans to build its own $400 million factory in Ohio.
  • The company also said it will scale back on its number of warehouses and delivery centers.
  • These are part of Peloton’s measures to cut costs after demand as lockdown eased.

Peloton is scrapping plans to build its own $400 million factory making its treadmills and bikes in Ohio

“The company is winding down the development of its Peloton Output Park (POP) manufacturing plan,” it said in a statement Tuesday. This would result in $60 million in restructuring capital expenditures, it said.

Peloton will also scale back on its number of warehouses and delivery centers in favor of third parties, it said. The moves will optimize its logistics network, the company said.

The plans for the plant were among a series of announcements the firm issued Tuesday, including the news that CEO John Foley is to step down. The firm also said it plans to slash around 2,800 jobs, or 20% of its corporate workforce, as part of cost-cutting measures that come on the back of falling demand for at-home fitness. 

The firm expects the measures to deliver at least $800 million a year in savings.

Peloton first announced plans to build the factory, its first in the US, in May 2021, and said that construction was expected to start later that summer. The company said that the factory in Wood County, Ohio, would make Peloton hardware and that Peloton would commit around $400 million to the factory.

“The new Peloton Output Park gives us a massive strategic lever to make sure we have capacity, quality, and economies of scale in our bike and tread product lines, to support our continued growth for years and years to come,” Foley said at the time.

The Peloton site was set to occupy more than 200 acres, with over one million square feet of manufacturing, office, and amenities space, and Peloton expected it to add around 2,000 jobs.

But sources told The New York Post in January that its opening – originally slated for 2023 – was being pushed back by a year because of waning demand for Peloton’s connected-fitness products.

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