Peloton scraps plans to build its own $400 million factory making its treadmills and bikes in Ohio
“The company is ending development of its Peloton Output Park (POP) manufacturing plan,” it said in a statement Tuesday. This would result in restructuring capital expenditures of $60 million, he said.
Peloton will also reduce its number of warehouses and delivery centers in favor of third parties, he said. The moves will optimize its logistics network, the company said.
The plans for the plant were part of a series of announcements the company released on Tuesday, including news that CEO John Foley was to step down. The company also said it plans to cut around 2,800 jobs, or 20% of its workforce, as part of cost-cutting measures that stem from lower demand for home fitness.
The company expects the measures to deliver at least $800 million in savings annually.
Peloton first announced plans to build the plant, its first in the United States, in May 2021, and said construction is expected to begin later this summer. The company said the Wood County, Ohio plant would manufacture Peloton gear and Peloton would commit about $400 million to the plant.
“The new Peloton Output Park gives us massive strategic leverage to ensure we have the capacity, quality and economies of scale in our bike and tread product lines, to support our continued growth for years to come. and years to come,” Foley told the Times.
The Peloton site was to occupy over 200 acres, with over one million square feet of manufacturing space, offices and amenities, and Peloton expected it to create around 2,000 jobs.