Dr. Rudebock weighs in on Peloton Layoffs

Unless you live under a rock, you’ve heard of Peloton Interactive (Peloton). The at-home workout system was a hit during quarantine with features like riding with other Peloton members, various workout options and being able to do it all in the comfort of your own home. With gyms re-opening, the demand for at-home equipment is not as prudent. Earlier this month, Peloton laid off roughly 2,800 employees. Dr. Rich Rudebock [he/him], the Robert L. and Sara Lou Cargill Chair of Business and a professor of Business at Oklahoma Baptist University (OBU) weighed in on what happened. 

“During the COVID-19 lockdown of 2020 many people bought Peloton equipment for their in-home workouts. The products are pricy but were very popular. As things loosened up, people were able to go back to their previous workout places and no longer needed the Peloton equipment. Because the initial investment was so high, many people tried to sell their slightly used machines on the secondary market. The glut of used equipment on the market negatively affected the demand for new equipment,” Rudebock said. Supply and demand is a basic principle in business, and Peloton felt the effects of having a great amount of supply and not enough demand.

“Peloton ramped up manufacturing (supply) when the demand was high because of the lock down. When demand slumped because the lock down was lifted & some equipment failed, Peloton had to reduce the supply by manufacturing fewer machines causing the need to reduce its workforce,” Rudebock said. Even with this layoff Rudebock does not underestimate the company.

“I expect that the company will stabilize but may never reach the sale’s highs it experienced in 2020. It could stabilize, come up with new innovative products, diversify into other areas, or simply be sold. It will be interesting to watch it to see what strategy it incorporates,” Rudebock said. This lay off may not have affected the OBU community directly, but Rudebock did use this opportunity to bring real-world issued to the classroom. He also gave some advice for students as they are in or about to enter into the workforce.

“It was a great example to discuss in class… They [layoffs] happen. The decisions are not personal and are usually not the fault of anything that you did or did not do. They hurt like heck though and are personal to the people who are losing their jobs. They are some of the most difficult decisions that managers must make,” Rudebock said. Even though layoffs happen, it is impossible to predict if you might be laid off in the future. Rudebock has some tips on what to do or what not to do so if you are laid off you are prepared.

“Keep your resume up to date. Keep your skills/education up to date. Network with other people in your industry. DO NOT keep any personal information/records on company equipment e.g. company computer, laptop, or phone. During mass layoff meetings, or any termination for that matter, it is normal for your computer/network access to be disabled before you even get back to your office,” Rudebock said. As many of us are either entering or have entered the workforce, we can watch what is happening in the world around us and learn from those who have gone before us so that we are better prepared to go out into the world.