Peloton Ends In-House Manufacturing of Its Exercise Machines
In an effort to further cut costs, Peloton is ending all in-house manufacturing of the company’s smart fitness equipment.
Peloton will instead outsource production to a Taiwanese manufacturer called Rexon Industrial Group, the company announced(Opens in a new window) on Tuesday. “Rexon will become the primary manufacturer of the hardware for Peloton's iconic Bike and Tread product lines,” the vendor added.
The decision comes months after Peloton’s CEO resigned and the company laid off 2,800 employees. The business experienced significant growth during the onset of the COVID-19 pandemic, when people were stuck at home and gyms were closed. But Peloton has since struggled(Opens in a new window) to attract new customers to its exercise machines, which reportedly led to a temporary halt in product production earlier this year.
As a result, the company has been trying to streamline its business with the hopes of making a turnaround. “Today we take another significant step in simplifying our supply chain and variablizing our cost structure—a key priority for us,” Peloton’s new CEO Barry McCarthy said in Tuesday’s announcement.
The halting of in-house manufacturing means Peloton is suspending production at Tonic Fitness Technology, which it acquired in 2019. Back in February, the company also announced it was winding down Peloton Output Park, which was originally scheduled to churn out exercise machines in Ohio by 2023.
As for Rexon, the company has been a partner manufacturer for Peloton for several years. “We plan to maintain a significant corporate and manufacturing presence in Taiwan with over 100 Peloton Taiwan team members who continue to play a key role in our engineering and manufacturing strategy,” Peloton added.
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