During the COVID-19 pandemic, stationary bike company Peloton was the talk of the town, allowing its customers to stay fit from the comfort of their own homes.
But once people started reemerging into the world to once again hit the gym and ride their bikes outdoors, the company began to struggle, a tailspin that has been ongoing ever since. The company’s stock dropped by almost 30 percent in 2025 alone, while over 100,000 subscribers decided to part ways.
In an unsurprising move, Peloton announced a flashy pivot to AI last year to drum up some much-needed enthusiasm amid the slump. (The company also used the new tech injection to justify a considerable price hike for subscribers.)
A new slew of AI equipment, featuring cameras that watch your every move, was somehow even more expensive than their already considerably pricy lineup of exercise equipment. Sales were off to a rough start towards the end of last year, indicating consumers weren’t flocking to stores to buy a stationary bike with an AI-enabled camera.
And shockingly, the company’s doubling down on AI doesn’t appear to have paid off. As Bloomberg reports, the company slashed 11 percent of its workforce this week as part of an existing effort to save $100 million. The goal is to optimize spending by “reshaping our teams and, in some cases, the locations where we work,” a spokesperson told the outlet.
It’s the latest sign that companies’ enormous investments in AI are simply nowhere near paying dividends. While many companies have argued that AI can do the jobs of those who’ve been caught up in layoffs, we have yet to see any compelling evidence for that conclusion, suggesting it’s more an excuse for implementing austerity measures than true AI automation. Case in point, a study published by researchers at MIT last year found that a staggering 95 percent of attempts to incorporate generative AI into business so far are failing to generate “rapid revenue acceleration.”
And it’s not just Peloton laying off employees. Other companies, including Amazon, Meta, and Pinterest — all of which have made major investments in AI — have recently announced plans to cut significant chunks of their workforce, indicating even more troubling days ahead.
Whether implementing major price hikes and offering more expensive hardware will buoy up any much-needed investor excitement for Peloton remains unclear at best. According to Bloomberg, analysts are already antsy about increasing prices scaring away customers, particularly as the cost of living continues to rise.
Meanwhile, Peloton users have long felt like they’re not being valued by the company, which has consistently doubled down on pushing equipment sales and raising prices.
“They built for the pandemic surge and then acted like it was never going to end,” one Reddit user wrote in response to the latest news. “The product still works, and the instructors are still the draw. The issue is they keep behaving like a hardware company instead of what they actually are, which is a subscription and content platform.”
“They should stop chasing hardware volume and casual users and double down on the people who actually use the platform!” the user added. “Power users are the base.”
More on Peloton: Peloton Announces Pivot to AI, Jacks Up Price
The post Peloton Institutes Mass Layoffs After Pivoting to AI appeared first on Futurism.
