Just two years ago, Peloton had it all. In a COVID-quarantined world, the pricey, interactive workout bikes offered everything people were craving, like exercise, social interaction, and a (virtual) escape from their homes. In spite of ads that were considered pretentious or sexist, sales soared, its customer base doubled, and wait times for new Peloton bikes stretched into months
But then, things changed. Gyms reopened, people got out of their houses and apartments, and suddenly they didn’t need that expensive exercise bike. Demand for new Peloton bikes dropped to the point that the company literally stopped making them and its stock price plummeted. The company had to recall its treadmills because of dangerous safety hazards. And even when Peloton did something right, it still generated bad publicity for the company.
All of that came to a head this week when Peloton booted its CEO and laid off roughly 2,800 employees. For a company that was hemorrhaging money, that came as no surprise. Fortunately for those laid off employees, Peloton also provided a severance package that included several months salary, extended health care benefits, stock options and job search assistance.
But what was a surprise, and an insult on top of injury for those laid off employees, was the last part of Peloton’s severance package. To help ease the pain of losing your job, the company with near-zero sales numbers and dwindling subscriber base, also provided its newly fired employees a year of free, all-access Peloton membership (regularly $39 month!). Because, even fired Peloton employees deserve shout outs from Peloton instructors (who haven’t been fired), right?
Maybe it was Peloton’s own belief that the good times would last forever that got the company to this point. And maybe it was the same lack of vision or self-awareness that compelled management to consider a year’s Peloton membership to be a severance package “perk.” Ultimately, it’s most likely the free membership perk is Peloton’s crass attempt to jack up its dwindling subscriber rolls to appear more attractive to a larger buyer, such as Nike, Amazon and even Disney. Corporate bean counters would call that scenario a “win-win.”
Peloton’s fired employees did manage to make their displeasure known, as it was reported they crashed the virtual introduction for the company’s new C.E.O. However, while a free Peloton membership as a severance package component may come off as insulting and tone-deaf now, things could get even worse. Should a buyer arrive to rescue the company, there’s no guarantee the new owners would even honor those fired employees’ free memberships. And, while that could be another public relations disaster for Peloton, for the almost 3,000 employees who just lost their jobs, it could add yet another layer of insult to an already painful injury.