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The roughly 50 Phoenix-area Peloton workers who were among 2,800 layoffs the exercise equipment manufacturer announced this week were based at a Phoenix warehouse.

Peloton notified the state on Feb. 8 that it planned to cut 52 jobs at a warehouse near 40th Street and Southern Avenue as part of a permanent reduction in force, according to a copy of the filing, which was provided by the state to The Arizona Republic through a public records request.

Federal labor laws require companies with 100 or more employees to notify the state workforce development agency of plant closings and mass layoffs.

Jobs included warehouse associates, field specialists, certified service technicians and operations managers. Workers were notified of the layoffs starting Feb. 8, but it wasn’t clear whether their employment was immediately terminated.

“We regret the need to implement this layoff,” Peloton’s head of human resources wrote in the filing.

The move comes six months after the company that makes popular stationary bicycles, treadmills and other fitness equipment announced it would hire 350 workers to open a member support center in Tempe. 

City officials said Peloton opened the Tempe center and made hires last fall but the company wouldn’t comment on how many positions were filled. Peloton also has a showroom at Scottsdale Fashion Square.

Peloton declined to comment on local impacts and referred The Arizona Republic to a statement issued Tuesday announcing the company’s plans.

The layoffs also impacted approximately 20% of Peloton's corporate staff in New York, and co-founder John Foley is stepping down as chief executive. The company plans to reduce operations at its owned and operated warehouses and among delivery teams and would expand partnerships with third-party providers instead.

The restructuring is expected to save at least $800 million annually once implemented, the Associated Press reported.

The company had seen demand dramatically increase at the start of the pandemic and then fall as gyms reopened. 

Company shares on a roller-coaster ride

Peloton and other at-home fitness companies saw demand grow during the first 18 months of the pandemic as COVID-19 closed gyms and people turned to home workouts and the outdoors for exercise. Health and fitness equipment revenue more than doubled to $2.3 billion from March to October 2020 and sales of treadmills and stationary bikes took off, leading to supply shortages, according to the Washington Post.

Demand for Peloton equipment in 2020 led the company’s revenues and stocks to skyrocket. The company reported earning $758 million in revenue in the spring and summer, a 232% increase from the same period the year before, and its stock went up more than 400% in 2020, the Post reported.

The growth led the company to expand its manufacturing operations and open a call center near the Loop 101 and Loop 202 interchange in Tempe.

The company in August announced it would move into a 50,000-square-foot building and hire member support employees to answer customer questions or help solve issues with their services or equipment. Sales, information technology, operations support and human resources-type positions were expected to be housed at the site.

But the company’s stock has since tumbled. Nearly all of the gains in 2020 were wiped out in 2021 as vaccines sent people back out to gyms, according to AP.

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The stock fell even further in January after reports the company would cut back on production as sales declined. That prompted speculation of potential takeover bids by Amazon and Nike.

Foley, the co-founder, said workforce cuts and other efforts would help rightsize the company and bring stability to Peloton.

“Peloton is at an important juncture, and we are taking decisive steps,” Foley said in a statement. “Our focus is on building on the already amazing Peloton Member experience, while optimizing our organization to deliver profitable growth.”

Reach reporter Paulina Pineda at or 480-389-9637. Follow her on Twitter @paulinapineda22.

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