(NEXSTAR) – Peloton isn’t halting production of its bikes and treadmills despite Thursday reports that there would be a pause, the company’s CEO said in a news release.
Rumors surfaced earlier in the day that the fitness company was putting a hold on production amid waning consumer demand, sending shares tumbling. In a note shared with the Peloton Team, co-founder and CEO John Foley called the rumors “false.”
“It has saddened me to know you read these things without the clarity and context that you deserve. Before I go on, I want all of you to know that we have identified a leaker, and we are moving forward with the appropriate legal action,” he wrote.
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Foley explained the company has faced leaks of confidential information, described as “incomplete, out of context, and not reflective of Peloton’s strategy,” this week.
In the company’s preliminary second-quarter fiscal results, also released Thursday, Foley said Peloton is “taking significant corrective actions to improve our profitability outlook and optimize our costs,” including “identifying reductions in our operating expenses.”
“Rumors that we are halting all production of bikes and Treads are false,” Foley stated in his company-wide note. He went on to say that Peloton “[feels] good about right-sizing our production,” but didn’t provide additional details.
While production isn’t pausing, layoffs may be on the horizon. Foley noted in his letter to the company that although layoffs have previously been viewed as “the absolute last lever we would ever hope to pull,” Peloton “now [needs] to evaluate our organization structure and size of our team.”
Peloton saw early success at the start of the COVID-19 pandemic when many were forced to remain home. As COVID-19 vaccines began rolling out in 2021, sales of its bikes, treadmills, and subscriptions stalled.
In November, the company saw its worst day as a publicly-traded company after telling investors that it will likely lose more money than it had expected in fiscal 2022. This came just months after Foley confirmed a child had died in a “tragic accident” involving Peloton’s Tread+.
Then in December, Peloton came under fire following a plot twist in the new “Sex and the City” series. In the first episode of the series revival, Carrie Bradshaw’s husband, Mr. Big (played by Chris Noth), suffers a heart attack and dies amid a strenuous exercise session on his Peloton bike. The death not only surprised viewers but apparently Peloton executives themselves, who later said in a statement that they were unaware of “the context surrounding the scene.”
Despite the string of bad news for the company, Foley said “connected fitness is here to stay.”
“[It] provides the convenience people need to stay active and centered and will continue to be a key part of the future of fitness. In fact, just a few days ago, we recorded our highest ever number of daily workouts — over 2.9M workouts.”