At-home fitness equipment maker Peloton has halted hiring, CNBC first reported on Friday, as shares of the company plunged 35% following earnings that showed its business took a hit from the reopening of the economy as more Americans headed back to gyms.
The decision to halt hiring across all departments was reportedly made during an all-hands meeting Friday, with no indication of how long that could last, CNBC reported.
Peloton declined to directly comment to Forbes on the report of a hiring freeze.
The news comes a day after the company reported financial results that showed a marked slowdown in growth: Earnings and revenue both missed expectations, and worse yet, the company slashed its sales forecast for the upcoming year by as much as $1 billion.
On the company’s earnings call Thursday evening, Peloton executives had hinted that they might need to make cost cuts in areas like hiring in order to cope with slowing sales and user growth.
After explosive growth in 2020, the company doubled its total number of employees in the first six months of 2021, adding more than 3,000.
With Peloton’s stock falling 35% to less than $56 per share, that means founder and CEO John Foley is no longer a billionaire, by Forbes’ calculations: His net worth fell nearly $500 million Friday.
Big Number: $10 Billion
That’s how much Peloton’s stock plunge wiped off of its market value on Friday.
“Some of these identified areas of savings include making significant adjustments to our hiring plans across the company, optimizing marketing spend and limiting showroom development,” Peloton’s chief financial officer, Jill Woodworth, said on the earnings call.
Peloton really took off during the height of the pandemic, as the company saw a huge 250% sales surge in the first quarter of 2020. With customers stuck exercising at home, business was booming and shares of the fitness equipment maker rose more than 400% in 2020. Amid a wider reopening of the economy in 2021, however, Peloton has felt the impact of more consumers heading back to gyms in person, with slowing sales and subscriber growth. Its stock is now down more than 60% so far in 2021.