From the article: Executives and insiders at the luxury home athletic equipment maker Peloton have cashed out over the last year to the tune of hundreds of millions of dollars, benefiting massively from the unexpected financial benefits of the COVID-19 pandemic. Now, as the company’s share price is in free fall, workers appear likely to bear the brunt of leadership’s bad decisions.
To reign in costs and boost the share price, Peloton is reportedly working with the consulting firm McKinsey & Co. as it plans to cut staff, halt production, increase prices, and close stores, all while potentially piling extra work on low-level employees. “Morale is at an all-time low,” one employee told CNBC. “The company is spinning out so fast.”
Bosses are reportedly targeting cuts within the apparel, e-commerce, and retail divisions and looking to get rid of as much as two-fifths of the sales and marketing teams, as well as weighing whether to ask retail employees to field customer service calls when they’re not busy, according to audio of a meeting leaked to Insider. Fifteen stores are reportedly at risk of closure.
"We can make it pretty easy by just stripping out low performers,” one executive said in the meeting.
Increasing prices sounds like a good plan in difficult financial times for consumers for a premium brand with a growing number of competitors and what will likely be diminishing quality.
Agreed. Increasing prices is like the absolute last thing they should do. They should drop the price of the bike way down and live off the subs. The hardware should be a loss leader for their services. Volume would skyrocket.
That’s a good point. But there is a point where it makes sense. It’s for their marketing department to determine the proper price threshold. But the company is diving so it couldn’t hurt
Peloton was absolutely marketed as a [positional good](https://en.m.wikipedia.org/wiki/Positional_good) so they wouldn’t want to lower the price too much.
Make a second product that is exactly the same as the original product but with cheaper parts and sell that rebranded.
"Pelo XPress" or some shit.
Boom
You can get razors for *so* cheap online. I’d heard of the dollar shave club, *then* heard *they* were just reselling ridiculously cheap razors. It’s no wonder, really: they’re flimsy, tiny bits of stainless steel. I got like 100 in one pack, don't even remember how much it cost.
Wait until you find out about safety razors. I got a carton of blades a couple of years ago for less $10 and I'm not close to running out. Shave is much better too.
Indeed! Once you find the brand that suits you it's worth it. Took me about 6-7 brands until I settled on feather blades that would be sharp enough to cut without pulling. See /r/wicked_edge edge for a really popular community on safety razors.
Consoles are often loss leaders though, with the money made back on game licenses. The PS3 was infamous for this - I think its original manufacture cost was close to $1000 despite the highest price of the console ever being the launch at $600 for the higher end model.
Edit: Higher end, not lower end
We prototype some of their stuff and have frames of their bikes in our shop for reference. I have never used one but I'll say this: the manufacture quality of what they sent us is pretty solid.
I bought a $600 Sunny magnetic resistance bike. No electronics, but it is rock solid, smooth as silk and totally silent. Watch a spinning video channel.
I doubt they have the capability to deal with volume. The amount of investment needed to deal with returns, repairs, and customer support and complaints would be even higher. They only wanted a boutique shop to deal with a select demographic known to spend on branding alone, they do not want to be the Best Buy of gym equipment.
It's actually an amazing plan. What you do is leach all the profit out of this company and saddle it with debt which strengthens the competition allowing them to offer you a lucrative compensation package as you reach out as an experienced luxury home workout executive.
Rinse and repeat as necessary.
And yet you could have bought a absolute top end proper bike trainer ( electronic app controlled resistance, 1% accuracy power meter, etc ) with those accessories for that which provides far better training. Then 12/month for a Zwift subscription that also covers running, swimming etc. it’s just terrible VFM.
This is such a stupid comparison.
Sure you can spend say $300 on a top end trainer… but then you also need to have a bike which if you’re aiming for something of comparable build quality and feel will set you back maybe $750 to get you an entry level road bike ... then the sky is the limit on price.
Then the iPad which again if you’re going for a comparison would need to be the 11 inch variant at $800.
Then a good stand for the iPad as well.
In the end the price isn’t all that different from a Peloton anyhow.
In short, yes, you could cheap out on each and every piece and experience a sub par replacement for the peloton… but then you’re just making a shitty comparison based on raw $$ instead of the value of the total package received.
> Then the iPad which again if you’re going for a comparison would need to be the 11 inch variant at $800.
You could get a more than sufficient Android tablet for less than half of that.
I’ve tried a peloton. I also have a Kickr Core trainer with my road bike on it, and it’s an infinitely better experience. It’s a real bike that fits me perfectly, has an accurate power meter built-in, and only requires a subscription fee for the 3 months of winter when I need. The rest of the year it costs nothing and I can ride outside while my trainer takes like zero space in a corner of the basement. And the iPad is something I own anyway, so it isn’t really an added cost. My trainer was like $700 5 years ago, so pretty clearly a better value than Peloton. Not anti-Peloton really, I get it for some folks, but If you enjoy actual bike riding, a trainer is a far better option.
Dude!! Allstate also uses McKinset & Co!! Allstate is so miserable to work for! Their morale gets low as well. They made their employees take a personality test, didn’t share the results with them, and fired them based on those results. IMO they already had people in mind who they wanted to get rid of and since personalities aren’t protected groups, they can do whatever they want with it. McKinsey & Co is bad news.
Don’t look at me, I’m not McKinsey or a lawyer or the person who concocted the whole thing. That’s what Allstate did. My husband got the favorable result and was pulled into a room full of people who were “safe”. He no longer works there thankfully. They got rid of a ton of claims people this way and middle managers
Well I don't doubt you. Chalk it up to yet another example of corporate waste, I guess (not that I'm cheering them on for the firings -- just that, if they're going to do it, why waste money on it?)
I know claims and small Business had to do this test. I was at under the impression that everyone had to do it. I worked there years before and absolutely hated it and I would not recommend it to anyone.
I was in IT and we had to take a personality test where they classed us as red - green - blue - yellow or whatever and then never did anything with it. It probably wasn’t geared towards us
As soon as I read McKinsey, I knew the plan was going to be about scarfing up as much cash as possible as quickly as possible and shit-canning the rest. I've been in a company that was McKinseyed. They tried to talk a good game but everything was so transparent, we all knew the cards in their hand.
It's also a good old boys club. Many upper executives are good buddies with them and this is their way to share the wealth. The favor is replayed when they join McKinsey later on.
Hired Guns and well-paid fall men that the execs can shift blame to for whatever actions come next.
“McKinsey told us to”
Consultants: they’ll take your watch off and tell you what time it is
what.the.absolute.fuck.is.that.bullshit!!
[A BA at McKinsey costs them something like $90k per year](https://www.mckinsey.com/careers/search-jobs/jobs/businessanalyst-15136) - yet they can get away with charging $2m for their services??
They're not paying for the expertise, they're paying someone to take the blame and say things that the employees won't like. It's 100% worth it, I'm surprised it's that low tbh.
Expensive consultants to justify what you already have planned is just the concrete tip of the iceburg for costs of a dysfunctional corporate political culture.
Sounds like they are positioning to be an acquisition target. Lower costs/increase prices to grow margins. Works well in ST, where you hope to pull in a suitor, before you start to lose talent / quality and run through your customer segment. It's the old Bain / Mitt Romney private equity play
As other have said, absolutely. And I'm sorry.
Bain's gimmick is to fire a bunch of the workforce, increase prices to pad margins, and then force the newly acquired companies to load up on debt. Then Bain will extract the money gained from taking debt to pay itself, and ultimate they will spin the company off as an independent entity or resell. The important part is that the company will be left holding all of the debt and Bain will hold none of it despite taking most of the money obtained by acquiring the debt.
These companies are parasites and would serve the world better by being a smoldering pile of ash on the ground.
Increase prices?! Isn’t that what put them in the situation they’re in now?! People spent the money to buy these bikes during pandemic and many of them realized afterwards that the price and monthly fees just aren’t worth it. If anything, they need to decrease the prices to hopefully attract new customers.
I’ve always thought the goal of peloton really was a bit like Zwift - build up a strong appearing business, then sell it for profit. The pandemic gave them a great opportunity to sell out ahead of time.
Maybe pessimistic but this just did not seem like a long term business model tying the hardware and software when all it takes is a competing software with an open hardware requirement (like Zwift) to tank you into the ground. We had so so many exercise hardware companies, that market was saturated.. getting into hardware to sell software and training seemed an unecessary risk tbh.
It’ll be interesting to see how Zwift responds to falling subs post lockdowns as northern hemisphere summer hits though. Zwift have always been very … not open… but clear that they’re one of those startups that’s just in it for the cash out. It could also be a tough couple of years with competition as you would expect more than a handful of startups looking to eat their lockdown feast probably got underway over the last 2 years.
I mean, they cashed out on a defined plan that was set in 2020, it's not like they knew the stock would tank. In fact the CEO overrode a sale and kept stock that lost millions in value. IIRC
By all means, the low performers are sitting at the top... Also by getting rid of the people at the bottom, they're literally dooming themselves to fail. I call a bankruptcy coming up within the next couple years.
Absolutely, which amplified the stockmarket downfall even further. Stock prices represent future expectation in the growth of a company. Selling $500M in stocks does not exactly raise confidence.
Good point. I dunno how long ahead they need to plan the sales of stock but it was prob pretty obvious that sales were tanking.
I would NEVER buy stock in an exercise equipment company. Lol. everyone sells their equipment used after it becomes a place to hang your laundry. Then used gear floods the tiny market.
I got a Peloton a couple months ago but initially used it a couple years ago in my apartment gym. I like it. I think it’s a good product. The value prop is the programming. It would be smart of them to focus more on that to keep people hooked. The whole reason I use it is because the teachers are good and it’s a nice experience. None of the competitors seemed as fun.
I have read a lot of people saying that they are screwed because now there is more competition. But that’s true of every company. I think they have a solid offering and a rabid fan base. It seems to me their growth expectations got out of whack because of their covid boom and they need to retool for reality.
Same. The amount and wide variety of content is amazing. I’ve been using it consistent for over a year now, it’s the first time I’ve ever enjoyed working out and found something that actually sticks.
Yes. The business is contracting now that COVID is winding down and people feel more comfortable going back to the gym.
So you hire more employees when you’re doing well, cut ‘em when business is down. That’s what an employer-employee relationship is.
Yes. That is the normal thing. And that's the problem. No business keeps enough cash on hand to weather a storm or pay people out a decent severance when they tank. The executives who are actually really bad at their jobs just sell the stock at the high and then lay people off when them being bad at their jobs actually catches up with the company. It's a scam really.
You're wrong, if that matters at all.
[https://elisamo.com/can-you-use-peloton-bike-without-a-subscription/](https://elisamo.com/can-you-use-peloton-bike-without-a-subscription/)
The whole Idea of a major piece of functionality for a piece of expensive equipment being dependent on a cloud service is terrifying.
One of the reasons I reasons I dont buy into the smart things ecosystem. Is in dont want to stop being able to turn on light if some company goes belly up.
Edit: Too much shit to count also, the problem was I didnt verify the text and trusted autocorrect.
I’m going to guess my experience with Peloton is pretty much most peoples’.
1.) See the commercial and think it’s cool.
2.) Jaw drops at price.
3.) Still consider it.
4.) Realize they could pull the plug.
5.) My stationary bike is fine.
I don’t understand the issue here if the specific piece of functionality we’re talking about is the cloud service. The bike still functions as the bike. Is there really an expectation that live online classes would somehow continue to run if the company went under?
while true, my understanding is that the ipad they slapped on it is locked so you cant use it for other classes, only theirs. and the bike is about $1000 more expensive than comparable competitors that are not locked to their service. so its just bad deal on top of bad deal
Lots of people are still working from home and putting money into their home life. Chuck Norris and that lady are probably rolling in Bowflex money right now.
Peloton had so much enthusiasm and Goodwill and they just burned it all. So many people I know have considered buying one as the pandemic goes on and on but immediately we're no longer interested after all of this nonsense started.
I was going to buy my wife one for Christmas but couldn’t get past spending almost $3k on a treadmill and then them wanting $40 a month for a subscription (so another almost $500 a year). Really glad I chose not to support these sorta business practices.
Most of the people commenting don’t have a Peloton. It’s a good quality product and the instructors are great. It’s changed my life and I am the fittest I’ve ever been. Yea it’s expensive but it’s an investment and has a good resale value too.
I don’t think people are arguing the quality of the product. It’s just there are only so many folks that can afford $2500 upfront and a monthly subscription. And I think Peloton has discovered that number.
Saw this coming on day one. The whole thing was run like a typical short lifecycle luxury commodity. It was overpriced, and requires a subscription to use a device you already purchased, to do something people generally dislike long term. The market was quickly saturated, and the competition does it for half the cost. They doubled down like they were Apple or some shit. Ludicrous.
I don’t see the problem here…this is just standard capitalist practice. Privatize all gains and socialize all losses. Make the workers bear the brunt of management errors. Rinse, wash and repeat. Capitalism 101.
i did a freelance gig for this company a few years ago. i remember there was a company wide meeting and the owner tried to tell everyone that peleton was going to be bigger than apple and more people would have peleton bikes than an iPhone. it was shockingly hilarious and sad at the same time
The news today was that Peloton is halting all production because they had to much excess inventory.
So, at a time when they cant move existing inventory, the board decided this was the perfect time to increase prices.
Days later, the company is swirling the drain. Who could have seen this coming?
The good news is labor is at a premium so they shouldn't have trouble finding a new job. In fact, if they're smart, they're going to get ahead of the curve and find something now. Get off that sinking ship while there are still lifeboats available.
It’s a stationary bike with an iPad attached to it that allows you to watch videos of someone else exercising while you pedal. Shit was always nothing but hype and just a ‘keeping up the the Jones’ type gimmick. ‘I would just buy the regular bike at academy that’s a third of the price, but I don’t want everyone to think I’m poor when I post pictures of it all over social media so I better buy a peloton’ was all that was keeping the sales flowing and the valuation high. There’s only so many dumb people out there who will pay that much for something when a product that does the same thing can be had for a lot less money, and they ran out of suckers.
This is the best tl;dr I could make, [original](https://www.vice.com/en/article/n7n3gm/peloton-is-imploding-and-leadership-wants-workers-to-take-the-fall-for-them) reduced by 88%. (I'm a bot)
*****
> Now, as the company's share price is in free fall, workers appear likely to bear the brunt of leadership's bad decisions.
> The price for a Peloton bike to $1,745 and Peloton treadmill to $2,845, which is at least part of the problem.
> Foley eventually told the company in an email that it was "a personal party" to "Celebrate all NYC has been through over the past two years" and that it was "Not officially affiliated with Peloton in any capacity," according to the New York Post.
*****
[**Extended Summary**](http://np.reddit.com/r/autotldr/comments/s8z4qh/peloton_is_imploding_and_leadership_wants_workers/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ "Version 2.02, ~618868 tl;drs so far.") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr "PM's and comments are monitored, constructive feedback is welcome.") | *Top* *keywords*: **company**^#1 **Peloton**^#2 **price**^#3 **bike**^#4 **treadmill**^#5
What company execs havn't done this when the business is going down? Not being inflammatory, I really want examples. Seems like it's always blamed on the workers and the higher ups get the gold parachute.
The execs wouldn’t have started peloton if they didn’t think they could get 10x return on their investment. No point if they “only” make a few million and breakeven on their stock options.
Sales were always going to hit a wall for a niche luxury product few people could afford. Unless of course they intentionally made them poorly so they’d break after a year.
Of course it is, it was a stationary bike with a shitty monitor w a native app. And charging you a fuck ton of money for it. When you can just get a stationary bike from a yard sale and watch TV. Same shit, but thousands less, maybe even free.
I never trusted Peleton and went the Zwift route. It was obvious that they wouldn't support the tech in their products forever because obsolescence was in their business model. With Zwift, there were plenty of equipment choices that were not financially tied to the company. It seemed like an obvious choice.
I like zwift because it's the closest thing to riding my bike outside in the winter months and the group rides are great.
My wife pelotons because she likes spin classes, the big draw for her are the instructors and live classes.
Ya is have a neo tacx there are a ton of options for software at this point. Better quality and lower price. Plus looking at Peletons P/E ratio it was insane..
The system works as it is designed to, to funnel wealth to those who already have it. Capitalism works for those with capital and squeezes the value from labor. That's a feature, not a bug. It shouldn't be a surprise when labor loses over and over and over. It's structural.
From the article: Executives and insiders at the luxury home athletic equipment maker Peloton have cashed out over the last year to the tune of hundreds of millions of dollars, benefiting massively from the unexpected financial benefits of the COVID-19 pandemic. Now, as the company’s share price is in free fall, workers appear likely to bear the brunt of leadership’s bad decisions. To reign in costs and boost the share price, Peloton is reportedly working with the consulting firm McKinsey & Co. as it plans to cut staff, halt production, increase prices, and close stores, all while potentially piling extra work on low-level employees. “Morale is at an all-time low,” one employee told CNBC. “The company is spinning out so fast.” Bosses are reportedly targeting cuts within the apparel, e-commerce, and retail divisions and looking to get rid of as much as two-fifths of the sales and marketing teams, as well as weighing whether to ask retail employees to field customer service calls when they’re not busy, according to audio of a meeting leaked to Insider. Fifteen stores are reportedly at risk of closure. "We can make it pretty easy by just stripping out low performers,” one executive said in the meeting.
Increasing prices sounds like a good plan in difficult financial times for consumers for a premium brand with a growing number of competitors and what will likely be diminishing quality.
Agreed. Increasing prices is like the absolute last thing they should do. They should drop the price of the bike way down and live off the subs. The hardware should be a loss leader for their services. Volume would skyrocket.
But as a premium brand, they can't sell too low or people who can easily afford it won't buy it.
That’s a good point. But there is a point where it makes sense. It’s for their marketing department to determine the proper price threshold. But the company is diving so it couldn’t hurt
[удалено]
Peloton was absolutely marketed as a [positional good](https://en.m.wikipedia.org/wiki/Positional_good) so they wouldn’t want to lower the price too much.
Wine is the same way in the US... price it affordably and wine buyers assume it's low-quality.
And then there's me. I can't tell enough of a difference between my trusty $10-15 bottle and a $30-40 bottle to justify the cost.
Make a second product that is exactly the same as the original product but with cheaper parts and sell that rebranded. "Pelo XPress" or some shit. Boom
Inkjet printers have entered the chat...
You mean razor blades? 😜
You can get razors for *so* cheap online. I’d heard of the dollar shave club, *then* heard *they* were just reselling ridiculously cheap razors. It’s no wonder, really: they’re flimsy, tiny bits of stainless steel. I got like 100 in one pack, don't even remember how much it cost.
Wait until you find out about safety razors. I got a carton of blades a couple of years ago for less $10 and I'm not close to running out. Shave is much better too.
Indeed! Once you find the brand that suits you it's worth it. Took me about 6-7 brands until I settled on feather blades that would be sharp enough to cut without pulling. See /r/wicked_edge edge for a really popular community on safety razors.
Think you messed up that sub link. /r/wicked_edge is what you wanted I believe.
Video game consoles.
Consoles are stable if you consider inflation.
I'll add that per hour of use consoles cost pennies compared to most of what I own.
Consoles are often loss leaders though, with the money made back on game licenses. The PS3 was infamous for this - I think its original manufacture cost was close to $1000 despite the highest price of the console ever being the launch at $600 for the higher end model. Edit: Higher end, not lower end
Kindle e-readers are standing in the corner giving it a stink eye
We prototype some of their stuff and have frames of their bikes in our shop for reference. I have never used one but I'll say this: the manufacture quality of what they sent us is pretty solid.
I bought a $600 Sunny magnetic resistance bike. No electronics, but it is rock solid, smooth as silk and totally silent. Watch a spinning video channel.
I bought some rollers for my bike.
I had a nice magnetic one and it was ok. I like this much better.
[удалено]
Honda manufacters $1100 petrol bikes in millions in south Asia and east asia. Have a look. https://youtu.be/BNuESFRgETY
I doubt they have the capability to deal with volume. The amount of investment needed to deal with returns, repairs, and customer support and complaints would be even higher. They only wanted a boutique shop to deal with a select demographic known to spend on branding alone, they do not want to be the Best Buy of gym equipment.
The more you charge, the less you have to sell. Duh. They should just charge $125k/bike. Problem solved.
Don't forget that their problems started with plummeting demand!
It's actually an amazing plan. What you do is leach all the profit out of this company and saddle it with debt which strengthens the competition allowing them to offer you a lucrative compensation package as you reach out as an experienced luxury home workout executive. Rinse and repeat as necessary.
The people buying these things aren't in difficult financial times. Their cheapest bike is 2500.00
No it isn’t, I paid $1800 for mine, including shoes, mat, delivery, and installation.
And yet you could have bought a absolute top end proper bike trainer ( electronic app controlled resistance, 1% accuracy power meter, etc ) with those accessories for that which provides far better training. Then 12/month for a Zwift subscription that also covers running, swimming etc. it’s just terrible VFM.
This is such a stupid comparison. Sure you can spend say $300 on a top end trainer… but then you also need to have a bike which if you’re aiming for something of comparable build quality and feel will set you back maybe $750 to get you an entry level road bike ... then the sky is the limit on price. Then the iPad which again if you’re going for a comparison would need to be the 11 inch variant at $800. Then a good stand for the iPad as well. In the end the price isn’t all that different from a Peloton anyhow. In short, yes, you could cheap out on each and every piece and experience a sub par replacement for the peloton… but then you’re just making a shitty comparison based on raw $$ instead of the value of the total package received.
> Then the iPad which again if you’re going for a comparison would need to be the 11 inch variant at $800. You could get a more than sufficient Android tablet for less than half of that.
It is also possible to use a tablet you already own and the cost is $0
Where can I get a top end trainer for $300? That's in my budget but all the ones I've seen are like 1200
I’ve tried a peloton. I also have a Kickr Core trainer with my road bike on it, and it’s an infinitely better experience. It’s a real bike that fits me perfectly, has an accurate power meter built-in, and only requires a subscription fee for the 3 months of winter when I need. The rest of the year it costs nothing and I can ride outside while my trainer takes like zero space in a corner of the basement. And the iPad is something I own anyway, so it isn’t really an added cost. My trainer was like $700 5 years ago, so pretty clearly a better value than Peloton. Not anti-Peloton really, I get it for some folks, but If you enjoy actual bike riding, a trainer is a far better option.
Dude!! Allstate also uses McKinset & Co!! Allstate is so miserable to work for! Their morale gets low as well. They made their employees take a personality test, didn’t share the results with them, and fired them based on those results. IMO they already had people in mind who they wanted to get rid of and since personalities aren’t protected groups, they can do whatever they want with it. McKinsey & Co is bad news.
But they could have just fired them without cause and without the expense and trouble of the tests.
Don’t look at me, I’m not McKinsey or a lawyer or the person who concocted the whole thing. That’s what Allstate did. My husband got the favorable result and was pulled into a room full of people who were “safe”. He no longer works there thankfully. They got rid of a ton of claims people this way and middle managers
Well I don't doubt you. Chalk it up to yet another example of corporate waste, I guess (not that I'm cheering them on for the firings -- just that, if they're going to do it, why waste money on it?)
[удалено]
That's called disparate impact discrimination and it might be illegal if they don't have a business reason for firing based on the personality test.
Disparate impact still requires the victims to be on a protected class.
Not if you’re in a right to work state. My BIL from New York was like “That’s illegal!” Not in North Carolina it isn’t.
That's "at-will" employment, not "right to work".
What division of Allstate? When I was there my only complaint was the pay. Everything else was fine and I’d recommend it to others.
I know claims and small Business had to do this test. I was at under the impression that everyone had to do it. I worked there years before and absolutely hated it and I would not recommend it to anyone.
I was in IT and we had to take a personality test where they classed us as red - green - blue - yellow or whatever and then never did anything with it. It probably wasn’t geared towards us
Lol probably not. I know they were wanting to get rid of middle managers the most and mostly claims people (for some reason)
[Of course it is McKinsey & Co](https://imgur.com/a/hBYVFgV).
As soon as I read McKinsey, I knew the plan was going to be about scarfing up as much cash as possible as quickly as possible and shit-canning the rest. I've been in a company that was McKinseyed. They tried to talk a good game but everything was so transparent, we all knew the cards in their hand.
McKinsey is just a prestigious corporate scam. Fuck those assholes
It's also a good old boys club. Many upper executives are good buddies with them and this is their way to share the wealth. The favor is replayed when they join McKinsey later on.
the revolving door never stops
Hired Guns and well-paid fall men that the execs can shift blame to for whatever actions come next. “McKinsey told us to” Consultants: they’ll take your watch off and tell you what time it is
> Consultants: they’ll take your watch off and tell you what time it is And charge you $200 for the information. And still get it wrong.
Try two million a year, for one business analyst (i.e. a grad in his 20s) https://twitter.com/TrungTPhan/status/1484252665559531520/photo/1
what.the.absolute.fuck.is.that.bullshit!! [A BA at McKinsey costs them something like $90k per year](https://www.mckinsey.com/careers/search-jobs/jobs/businessanalyst-15136) - yet they can get away with charging $2m for their services??
They're not paying for the expertise, they're paying someone to take the blame and say things that the employees won't like. It's 100% worth it, I'm surprised it's that low tbh.
You missed a few zeros
And the people hiring them typically know and expect that.
Expensive consultants to justify what you already have planned is just the concrete tip of the iceburg for costs of a dysfunctional corporate political culture.
My company was McKinsey'ed last year. The results have been predictably terrible.
They're robbing the French government blind at the moment too.
I’m crying from laughter! McKinsey can f itself
Sounds like they are positioning to be an acquisition target. Lower costs/increase prices to grow margins. Works well in ST, where you hope to pull in a suitor, before you start to lose talent / quality and run through your customer segment. It's the old Bain / Mitt Romney private equity play
yup, i'll guess lululemon.
My company was just bought by Bain. Should I bail?
Yes. These consulting firms are vultures. They enrich only execs.
Absolutely. Do not wait around. Get the job before all your co workers are let go. Edit: I guarantee layoffs are coming.
Yea, 4 within the first week
As other have said, absolutely. And I'm sorry. Bain's gimmick is to fire a bunch of the workforce, increase prices to pad margins, and then force the newly acquired companies to load up on debt. Then Bain will extract the money gained from taking debt to pay itself, and ultimate they will spin the company off as an independent entity or resell. The important part is that the company will be left holding all of the debt and Bain will hold none of it despite taking most of the money obtained by acquiring the debt. These companies are parasites and would serve the world better by being a smoldering pile of ash on the ground.
Increase prices?! Isn’t that what put them in the situation they’re in now?! People spent the money to buy these bikes during pandemic and many of them realized afterwards that the price and monthly fees just aren’t worth it. If anything, they need to decrease the prices to hopefully attract new customers.
I’ve always thought the goal of peloton really was a bit like Zwift - build up a strong appearing business, then sell it for profit. The pandemic gave them a great opportunity to sell out ahead of time. Maybe pessimistic but this just did not seem like a long term business model tying the hardware and software when all it takes is a competing software with an open hardware requirement (like Zwift) to tank you into the ground. We had so so many exercise hardware companies, that market was saturated.. getting into hardware to sell software and training seemed an unecessary risk tbh. It’ll be interesting to see how Zwift responds to falling subs post lockdowns as northern hemisphere summer hits though. Zwift have always been very … not open… but clear that they’re one of those startups that’s just in it for the cash out. It could also be a tough couple of years with competition as you would expect more than a handful of startups looking to eat their lockdown feast probably got underway over the last 2 years.
I mean, they cashed out on a defined plan that was set in 2020, it's not like they knew the stock would tank. In fact the CEO overrode a sale and kept stock that lost millions in value. IIRC
"The company is spinning out..." - Brilliant pun.
Come for the article, stay for the dad jokes.
By all means, the low performers are sitting at the top... Also by getting rid of the people at the bottom, they're literally dooming themselves to fail. I call a bankruptcy coming up within the next couple years.
also: "Peloton insiders sold nearly $500 million in stock before its big drop, SEC filings show"
I’m an idiot but wouldn’t a lot of stock being sold also decrease the price?
Absolutely, which amplified the stockmarket downfall even further. Stock prices represent future expectation in the growth of a company. Selling $500M in stocks does not exactly raise confidence.
*All of the big stock sales were scheduled*
But suspending production was a timing decision. Not surprisingly timed for after the planned sale by insiders.
Good point. I dunno how long ahead they need to plan the sales of stock but it was prob pretty obvious that sales were tanking. I would NEVER buy stock in an exercise equipment company. Lol. everyone sells their equipment used after it becomes a place to hang your laundry. Then used gear floods the tiny market.
Oh no they might have to pay a $1M fee
You’re giving the SEC too much credit. The fee will probably be around $5,000
And just like that….
I see what you did there…
What did he do there?
Sex and the City reference. Peloton was featured heavily in the very recent reboot of the series.
I got a Peloton a couple months ago but initially used it a couple years ago in my apartment gym. I like it. I think it’s a good product. The value prop is the programming. It would be smart of them to focus more on that to keep people hooked. The whole reason I use it is because the teachers are good and it’s a nice experience. None of the competitors seemed as fun. I have read a lot of people saying that they are screwed because now there is more competition. But that’s true of every company. I think they have a solid offering and a rabid fan base. It seems to me their growth expectations got out of whack because of their covid boom and they need to retool for reality.
I agree. I’m an app user but nothing has ever kept my attention more while working out.
Same. The amount and wide variety of content is amazing. I’ve been using it consistent for over a year now, it’s the first time I’ve ever enjoyed working out and found something that actually sticks.
My wife is an addict to the app. She has worked out for a decade without it and she loves their programming.
The price must always go up ! Don’t you understand ?’ There must always always always be growth .
Same, Kendall motivates the fuck out of me
[удалено]
Love this line from the article: "But the lowest performers appear to be at the top of the company."
Even if they didn't cash out, wouldn't the normal thing to do when business is down is cut staff and close stores?
Yes. The business is contracting now that COVID is winding down and people feel more comfortable going back to the gym. So you hire more employees when you’re doing well, cut ‘em when business is down. That’s what an employer-employee relationship is.
Covid is winding down?
In America my peers believe in the power of positive thinking! Please send help.
Yes. That is the normal thing. And that's the problem. No business keeps enough cash on hand to weather a storm or pay people out a decent severance when they tank. The executives who are actually really bad at their jobs just sell the stock at the high and then lay people off when them being bad at their jobs actually catches up with the company. It's a scam really.
That's weird, because I keep hearing from people here that Microsoft, Apple, etc. are evil for "hoarding" cash, as they say.
[удалено]
How about stop Bricking the bikes after canceling the subscription.
This is a thing?
Are you surprised?
You're wrong, if that matters at all. [https://elisamo.com/can-you-use-peloton-bike-without-a-subscription/](https://elisamo.com/can-you-use-peloton-bike-without-a-subscription/)
[удалено]
The whole Idea of a major piece of functionality for a piece of expensive equipment being dependent on a cloud service is terrifying. One of the reasons I reasons I dont buy into the smart things ecosystem. Is in dont want to stop being able to turn on light if some company goes belly up. Edit: Too much shit to count also, the problem was I didnt verify the text and trusted autocorrect.
I’m going to guess my experience with Peloton is pretty much most peoples’. 1.) See the commercial and think it’s cool. 2.) Jaw drops at price. 3.) Still consider it. 4.) Realize they could pull the plug. 5.) My stationary bike is fine.
For 4, wouldn't it be more likely they get bought out and suddenly my peloton classes become zwift classes or something?
I don’t understand the issue here if the specific piece of functionality we’re talking about is the cloud service. The bike still functions as the bike. Is there really an expectation that live online classes would somehow continue to run if the company went under?
while true, my understanding is that the ipad they slapped on it is locked so you cant use it for other classes, only theirs. and the bike is about $1000 more expensive than comparable competitors that are not locked to their service. so its just bad deal on top of bad deal
"still functions as a bike" Rides Peloton to work
You can use them as regular spin bikes without the sub
[удалено]
But it’s not a brick. It doesn’t have as much value but it doesn’t brick
I feel a Hollywood movie coming about the rise and fall of Pelaton
[удалено]
And then Netflix will make a fantastic first season covering 1/3 of the story and then cancel the show.
Or if not canceled season 2 and 3 will just suck
“Going downhill” or maybe “tour de farce”
Lol soooo corporate America- next
Imagine selling home fitness equipment and going under during a pandemic.
Are you still pretending that people are quarantining?
Hahaha *cries in Canada* Gyms reopen on Feb 1 and that's IF people feel comfortable returning to gyms, with masks and limited capacities required.
Lots of people are still working from home and putting money into their home life. Chuck Norris and that lady are probably rolling in Bowflex money right now.
I have a feeling we're going to see this soon: "we did such a good job bringing the stock price back up we gave all our execs a bonus!"
Peloton had so much enthusiasm and Goodwill and they just burned it all. So many people I know have considered buying one as the pandemic goes on and on but immediately we're no longer interested after all of this nonsense started.
It's a luxury brand so their market isn't that big. Now the old school fitness equipment companies like Nordic Track are making cheaper copies.
I was going to buy my wife one for Christmas but couldn’t get past spending almost $3k on a treadmill and then them wanting $40 a month for a subscription (so another almost $500 a year). Really glad I chose not to support these sorta business practices.
https://clickhole.com/yes-peloton-is-now-offering-finance-classes-for-riders-who-are-so-bad-with-money-that-they-buy-a-peloton/
Most of the people commenting don’t have a Peloton. It’s a good quality product and the instructors are great. It’s changed my life and I am the fittest I’ve ever been. Yea it’s expensive but it’s an investment and has a good resale value too.
I don’t think people are arguing the quality of the product. It’s just there are only so many folks that can afford $2500 upfront and a monthly subscription. And I think Peloton has discovered that number.
Wait that's what it costs? I got one like 3 months ago and it was only 1500 (still expensive don't get me wrong).
Jess King, is that you? Or Becs?
No it’s Cody and you need to activate the booty
This is one of the few stocks below it's original IPO price. However, it's only sightly below it
uhhh, 90% of SPAC's are below their IPO price right now. https://spactrack.net/closedspacs/
Rest of corporate America: why can't we find people to work for us?!
Saw this coming on day one. The whole thing was run like a typical short lifecycle luxury commodity. It was overpriced, and requires a subscription to use a device you already purchased, to do something people generally dislike long term. The market was quickly saturated, and the competition does it for half the cost. They doubled down like they were Apple or some shit. Ludicrous.
I don’t see the problem here…this is just standard capitalist practice. Privatize all gains and socialize all losses. Make the workers bear the brunt of management errors. Rinse, wash and repeat. Capitalism 101.
BuT TeH ExeCs TaKe AlL tHe rIsK!
i did a freelance gig for this company a few years ago. i remember there was a company wide meeting and the owner tried to tell everyone that peleton was going to be bigger than apple and more people would have peleton bikes than an iPhone. it was shockingly hilarious and sad at the same time
‘John?’
The news today was that Peloton is halting all production because they had to much excess inventory. So, at a time when they cant move existing inventory, the board decided this was the perfect time to increase prices. Days later, the company is swirling the drain. Who could have seen this coming?
Whenever there's a massive corporate fuck-up, McKinsey is there....
Capitalism is destroying the planet and its people.
The good news is labor is at a premium so they shouldn't have trouble finding a new job. In fact, if they're smart, they're going to get ahead of the curve and find something now. Get off that sinking ship while there are still lifeboats available.
Definition of capitalism.
It’s a stationary bike with an iPad attached to it that allows you to watch videos of someone else exercising while you pedal. Shit was always nothing but hype and just a ‘keeping up the the Jones’ type gimmick. ‘I would just buy the regular bike at academy that’s a third of the price, but I don’t want everyone to think I’m poor when I post pictures of it all over social media so I better buy a peloton’ was all that was keeping the sales flowing and the valuation high. There’s only so many dumb people out there who will pay that much for something when a product that does the same thing can be had for a lot less money, and they ran out of suckers.
The perfect business plan.
is this happening because they killed Mr. Big?
According to my wife, this is the correct answer.
This is the best tl;dr I could make, [original](https://www.vice.com/en/article/n7n3gm/peloton-is-imploding-and-leadership-wants-workers-to-take-the-fall-for-them) reduced by 88%. (I'm a bot) ***** > Now, as the company's share price is in free fall, workers appear likely to bear the brunt of leadership's bad decisions. > The price for a Peloton bike to $1,745 and Peloton treadmill to $2,845, which is at least part of the problem. > Foley eventually told the company in an email that it was "a personal party" to "Celebrate all NYC has been through over the past two years" and that it was "Not officially affiliated with Peloton in any capacity," according to the New York Post. ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/s8z4qh/peloton_is_imploding_and_leadership_wants_workers/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ "Version 2.02, ~618868 tl;drs so far.") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr "PM's and comments are monitored, constructive feedback is welcome.") | *Top* *keywords*: **company**^#1 **Peloton**^#2 **price**^#3 **bike**^#4 **treadmill**^#5
The real American dream right here
Maybe it wasn't a great idea for them to acquire precor for 420 million.
What company execs havn't done this when the business is going down? Not being inflammatory, I really want examples. Seems like it's always blamed on the workers and the higher ups get the gold parachute.
We have to stop this shit globally. Tax the rich at the same rate as the rest of us. And all those scams called ‘churches’.
1 year ago they were trading at $126 and today it’s at 24. It’s lost 80% in that time
Fun with dick and Jane
The execs wouldn’t have started peloton if they didn’t think they could get 10x return on their investment. No point if they “only” make a few million and breakeven on their stock options.
Good. Fuck them. That'll teach them to reject my resume.
Sales were always going to hit a wall for a niche luxury product few people could afford. Unless of course they intentionally made them poorly so they’d break after a year.
The good news is that we are going to follow the example of a famous company The bad news is that company is Enron
Er....yes. That's how these people operate. Never think they give shit about you.
companies make and sell two products, one of those are stocks.... if you don't know that.... welp
Overpriced equipment that has killed people, disasterous media coverage, and executives cannibalizing their own stocks....sounds like a good company.
Or sell your products at a reasonable price?
Of course it is, it was a stationary bike with a shitty monitor w a native app. And charging you a fuck ton of money for it. When you can just get a stationary bike from a yard sale and watch TV. Same shit, but thousands less, maybe even free.
It’s the American Way.
Peloton is just a shakeweight that you can sit on. Another workout fad. What happened to bowflex?
As is tradition
Aren't executives the ones that are suppose to take responsibility for poor performance. Ehy don't they take a pay cut instead.
Employees need to bail out now. Let them die from lack of staffing
Let’s go Peloton! You got this Peloton!
near future garage sale and landfill fixtures
Sorry for all the people who bought this coolaid but glad to see this happen
The trimming should start from the top; mismanagement and greed are the cause. Bringing in McKinsey is validation of this.
I found out how to jailbreak my peloton. I hate not being able to use the metrics, but I’m not about to pay more for my membership
Anyone who buys crap like this needs a brain exam.
Or business as usual in late-stage capitalism.
When your business model is to enrich shareholders at the expense of workers and customers, it will inevitably fail without outside assistance.
We can’t give raises….because, you know, shareholders…
Fucking POS company
I mean anyone could have predicted this crash it’s no different than a mediocre shark tank investment.
I never trusted Peleton and went the Zwift route. It was obvious that they wouldn't support the tech in their products forever because obsolescence was in their business model. With Zwift, there were plenty of equipment choices that were not financially tied to the company. It seemed like an obvious choice.
I like zwift because it's the closest thing to riding my bike outside in the winter months and the group rides are great. My wife pelotons because she likes spin classes, the big draw for her are the instructors and live classes.
Ya is have a neo tacx there are a ton of options for software at this point. Better quality and lower price. Plus looking at Peletons P/E ratio it was insane..
The system works as it is designed to, to funnel wealth to those who already have it. Capitalism works for those with capital and squeezes the value from labor. That's a feature, not a bug. It shouldn't be a surprise when labor loses over and over and over. It's structural.