A report about Peloton Interactive Inc. halting production of its connected fitness products isn’t true, CEO John Foley said Thursday (Jan. 20) in a note to employees, and the company is “moving forward with the appropriate legal action” against the person who leaked the info to CNBC, The Wall Street Journal (WSJ) reported.
The CNBC report triggered a 24% drop in Peloton’s stock price Thursday, according to WSJ, which reported Peloton is “reviewing the size of its workforce and resetting production levels as the company adapts to more seasonal demand for its exercise equipment.”
WSJ reported that CNBC had referenced internal documents when it said Peloton would halt Bike production in February and March and suspend production of its Bike+ until June. CNBC also said Peloton won’t manufacture its Tread treadmill machine for six weeks starting in February.
“The information the media has obtained is incomplete, out of context, and not reflective of Peloton’s strategy,” Foley wrote in his employee note, per WSJ.
“We feel good about right-sizing our production, and, as we evolve to more seasonal demand curves, we are resetting our production levels for sustainable growth,” he added, according to WSJ, further stating, “We’ve said layoffs would be the absolute last lever we would ever hope to pull. However, we now need to evaluate our organization structure and size of our team.”
Peloton has over 6,700 U.S. employees and hundreds more overseas, according to WSJ.
Earlier this week, Peloton said customers will pay an extra $250 for delivery and assembly of its Bike and another $350 for its Tread starting Jan. 31 due to inflation and increasing supply chain costs, bringing the prices of the Bike and Tread to $1,745 and $2,845, respectively.
Read more: Peloton Prices Will Rise 15% as Connected Fitness Firm Ends Free Delivery and Assembly
Peloton had previously included the delivery and assembly fees in the total price of the Bike and Tread. Peloton’s Bike+ product will stay at $2,495.
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