Peloton will stop making its own bikes and treadmills, a drastic change for the struggling company aimed at cutting costs and ensuring its ability to remain afloat
Calling the change a"natural progression" in a statement Tuesday, Peloton said Taiwanese manufacturer Rexon Industrial Corp. will become the primary manufacturer of its exercise equipment in the future. As a result, Peloton will shut down its factories operated by Tonic Fitness Technology, a company it bought in 2019.
Read MoreAbout 600 employees at Tonic will be laid off, according to Bloomberg News. Peloton's strugglesTuesday's changes are the most significant under McCarthy, who has been tasked with turning around the failing company since being installed in February. Peloton said in May that it had just $879 million in cash in the bank at the end of the quarter, which has left it"thinly capitalized," McCarthy said.
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