Peloton Cuts Jobs While Forecasting Revenue Surge for 2026

Peloton Interactive has announced plans to reduce its global workforce by 6 percent as part of a broader turnaround strategy aimed at boosting cost savings. This decision, coupled with a positive revenue forecast for 2026, has led to a nearly 23 percent increase in the company’s shares during premarket trading. The exercise-bike manufacturer reported a surprise profit for the fourth quarter, indicating a potential recovery from recent challenges.

As part of its restructuring efforts, Peloton aims to save an additional $100 million by the end of its next fiscal year. The layoffs, as well as reductions in indirect costs and the relocation of some offices, are expected to contribute significantly to this goal. Peter Stern, who joined Peloton from Ford Motor Company in January, is spearheading the turnaround initiative designed to address declining sales of the company’s premium stationary bikes and treadmills. This decline followed a surge in demand during the COVID-19 lockdowns when home fitness became a priority for many consumers.

In a clear indication that the company’s cost-cutting measures are yielding results, Peloton reported a 20 percent decrease in operating expenses for the fourth quarter. Furthermore, general and administrative expenses fell by 33 percent compared to the previous year. The gross margin for its connected fitness products, which include technology-enabled home exercise machines, improved by 900 basis points to 17.3 percent year-on-year. Peloton’s gross profit in this segment rose significantly, reaching $34.4 million, a 96 percent increase.

The company posted a quarterly profit of 5 cents per share, surpassing Wall Street’s expectations of a loss of 6 cents per share. Looking ahead, Peloton has forecasted its 2026 revenue to be between $2.4 billion and $2.5 billion, exceeding analysts’ estimates of $2.41 billion, according to data compiled by LSEG.

Despite the positive outlook, Peloton anticipates that tariffs will impact its 2026 free cash flow by $65 million. To mitigate these added costs, the company plans to adjust its pricing strategy accordingly. For the quarter ending June, Peloton reported total revenue of $606.9 million, which surpassed analyst expectations of $579.80 million.

As Peloton navigates through its restructuring phase, the focus remains on stabilizing its operations and ensuring sustainable growth in a competitive fitness market. The forthcoming changes are crucial for the company’s future as it seeks to capitalize on a recovering economy and shifting consumer habits.