Peloton bike seller and Calm meditation app cuts jobs – FBC News

[Source: BBC]

US-based meditation app Calm has laid off 20% of its workforce, becoming the latest US tech company to announce job cuts.

The company did not specify the reason for the cuts, which affect about 90 people out of its 400 employees.

The tech sector is generally under pressure from investors to rein in costs as the pandemic-triggered boom in online activity wanes.

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Peloton also announced a new round of job cuts, affecting 800 people.

The company is struggling with declining sales as demand for its tech-connected exercise equipment declines.

Calm boss David Ko said the company was “not immune” to the wider economic climate.

“In developing our strategic and financial plan, we reviewed the investment thesis behind each project and it became clear that we need to make changes,” he wrote in a memo to staff.

“I can assure you that it was not an easy decision, but it is particularly difficult for a company like ours whose mission is focused on mental health and well-being in the workplace.

While U.S. hiring remained strong, official figures show the economy contracted in the first half. Analysts expect a further slowdown in the coming months.

Many companies in the tech and housing sectors, which boomed during the pandemic recovery, have already begun to scale back operations.

More than 500 start-ups have laid off staff this year, a dramatic change from last year’s environment, according to layoffs.ai, a website that tracks announcements.

More traditional businesses have also been affected, with electronics retailer Best Buy cutting hundreds of jobs at its stores across the United States this week.

Peloton cut around 3,000 jobs in February as a new chief executive pledged a sweeping turnaround. It has abandoned its factory plans in the United States and said last month that it would no longer manufacture its own equipment.

Chief executive Barry McCarthy said on Friday the company would also rely more on outside companies for delivery and customer service, with most of the latest layoffs coming from those teams.

He also said the company would “significantly” reduce its bricks-and-mortar presence and raise prices for its products.

“These changes are critical if Peloton is ever to become cash flow positive,” he wrote to the staff. “Money is oxygen. Oxygen is life. We just have to become self-sufficient based on cash flow.”

Like Peloton, Calm, co-founded in the US in 2012 by British tech entrepreneurs Michael Acton Smith and Alex Tew, benefited from a surge in demand triggered by the Covid 2020 lockdowns.

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