Workplace

What Peloton’s warehouse workers really think about all those layoffs

Warehouse workers sensed the writing on the wall. It was still painful.

Peloton bikes with the lights dimmed.

Laid-off Peloton workers are frustrated that bad business decisions put them in this spot. But mostly they’re sad to lose a solid gig.

Photo: Jeenah Moon/Bloomberg via Getty Images.

Brandon Carroll really liked his job. When he delivered Peloton equipment to customers in and around St. Louis, they were genuinely excited to see him. For many, Peloton is a glittering status symbol, the promise of a healthier, easier future. The day you get a Peloton bike or treadmill? That’s the happiest day of your week. Maybe even your month.

“No one is unhappy to see you,” Carroll said. “You feel like Santa Claus.”

Positive customer interactions helped keep morale up, despite the company’s various media and market snafus. Peloton warehouse workers could sense the writing on the wall. The company froze hiring in November and considered laying off 41% of its sales and marketing staff in January. Demand had fallen far below early pandemic levels, and the stock price was sinking. But field operation specialists still felt busy in the small but mighty St. Louis warehouse, Carroll said. “Pretty consistently we were one of the top-rated warehouses in the company,” he said.

So when Peloton laid off 2,800 people a few weeks ago, it wasn’t totally unexpected. But it hurt. The shakeup affected everyone, from recruiters to marketers to former CEO John Foley himself. The company laid off everyone at the St. Louis and Seattle warehouses and significantly cut down the Denver warehouse. Peloton declined to break down the demographics of the 2,800 people laid off, but told Protocol 20% were corporate employees. Peloton instructors — who rose to influencer status in the early pandemic — were not affected.

Protocol spoke to a handful of laid-off employees who were a part of Peloton’s delivery and manufacturing operations. The general consensus mirrored some of the gratitude reflected in ex-Pelotoners’ parting LinkedIn posts. The company offered satisfactory pay and benefits, as well as mentorship opportunities. They’re frustrated that bad business decisions put them in this spot (a sentiment reflected in recent Glassdoor posts). But mostly, they’re sad to lose a solid gig.

A day at a Peloton warehouse

The St. Louis warehouse was tight knit. Demand ballooned in the early days of the pandemic, when everyone wanted Peloton equipment. Peloton needed more bikes, treadmills and workers, stat. It bought exercise equipment manufacturer Precor, and it even made plans to build its first U.S. factory in Ohio. It had to hire to keep up.

“There were all different kinds of people,” Carroll said about the approximately 34 workers in St. Louis. People trying to pay for school, people who had been affected by early COVID layoffs. Many came to Peloton after being referred by friends who already worked there, creating a workplace with personal connections. In St. Louis and other warehouses, many came from companies like Target or Amazon. “That was a network of people that were separated by one or two degrees because they already knew someone who worked there,” Carroll said.

A standard day at a Peloton warehouse involved morning meetings about warehouse reviews, checking inventory and going out for deliveries. The Peloton delivery process required some showmanship. A van with a prominent Peloton logo pulled into the driveway, in view of jealous neighbors. It always came within the two- or four-hour delivery window and always with notice. Masked workers decked in Peloton gear hopped out, promptly asking if they should wear disposable boot covers on their shoes before entering the home. After bringing the equipment in, the worker explained how to use it, ideally “with a certain charisma” Carroll said.

Workers felt Peloton’s allure; they believed in the product. Former Denver field specialist Skylar Stetler lost his job as a gymnastics coach in April 2020. He started at Peloton in November of that year, and it felt promising. “[Peloton] came in like ‘the sky’s the limit,’” Stetler said. “There are going to be new roles opening up. Imagine it, it will happen. They set themselves up with visions of grandeur.”

Wages were high compared to standard warehouse work. The base pay average for a Peloton field specialist is $22/hour, according to Glassdoor. The starting salary for North American and European-based hourly workers is $19/hour, according to Peloton. Laid-off Pelotoners told Protocol the COVID protocols were stringent, and the benefits were standard with 80 hours PTO per year. Before the layoffs, Stetler was aiming for mentorship for a supply chain analytics role.

But in the months leading up to the layoffs, their prospects felt shaky. Stetler noticed a lack of urgency to fill positions when people left. The company couldn’t offer temporary workers full-time positions. Carroll felt that with each passing day, his bosses had less information. Morale plummeted.

“Things just weren’t really adding up, and so you felt a bit lost,” Stetler said.

'An amicable breakup'

When former St. Louis field specialist Daniel Murphy got the layoff call, his first thought was “empty hole in my wallet.” Murphy was about to hand over his credit card to get his car fixed.

The St. Louis workers took a day to decompress, coming together that night for drinks. But the next day, it was hustle time. Carroll said he applied to 22 different jobs that morning. Some people had just had their first kid or gotten engaged or, in Carroll’s case, bought a house.

There were mixed feelings. “A lot of people might compare it to an amicable breakup of some kind. Things had kind of not been going great for a while,” Carroll said. The warehouse workers had grown accustomed to the fair pay and benefits. If they wanted to do a similar job elsewhere, they would likely get paid less.

Some employees thought back to the workers from XPO Logistics who were brought in during busy seasons. Before the mass layoff, roughly 60% of deliveries were carried out by Peloton workers. Peloton CFO Jill Woodworth said in the company’s earnings call that it will drop to 40%, with the majority of deliveries handled by third parties.

Some workers were concerned about XPO workers replacing them. A handful of workers at the St. Louis warehouse talked about organizing in response to this fear of outsourcing, though nothing came of those conversations. In an email to staff this month, Foley noted that the company has “scaled” partnerships with third-party logistics teams to keep up with demand. Now, Peloton’s significantly reducing “our owned and operated warehousing and delivery footprint.”

Peloton warehouse workers are laser-focused on customer satisfaction. It’s part of their regular assessment. Third-party workers have less financial incentive and training to deliver Peloton equipment with all the added bells and whistles, Carroll said. Some customers have voiced frustrations with XPO’s Peloton delivery process, particularly on Reddit. Peloton tries to address customer delivery issues as quickly as possible, Peloton spokesperson Amelise Lane told Protocol. XPO spokesperson Joe Checkler said scores for Peloton deliveries are between 95 and 100 out of 100. “We immediately act to rectify customer concerns whenever there's an issue,” Checkler said.

But Carroll is troubled by what Peloton deliveries might look like without his warehouse. “To have this third-party service who is going to make your customers less happy, it just doesn’t add up to any of us,” Carroll. “I think that was what upset a lot of people.”

What’s next for Peloton and its ex-workers?

The ex-Peloton workers have varying hopes for the company. Carroll is concerned about the quality of delivery. Some may question how much delivery matters when it comes to Peloton’s desirability, though. A personalized delivery experience is a plus, but it might not matter as much when it comes to actually buying the Peloton.

Murphy wants to see the company succeed and hire back more people. He hopes the company retains its fair wages and transparent culture. “I really do hope that that continues and that more employees can benefit from that culture that they started with,” Murphy said. Stetler, who says he “drank the Kool-Aid” and became a big Peloton fan, would love to see Peloton bikes and treadmills marketed toward the masses instead of as luxury products.

As for their personal job pursuits, many felt a rush of support after the series of viral posts on LinkedIn. A few said it will likely be easier for those on the corporate side of Peloton to find positions. They’re generally more plugged-in to LinkedIn, and tech workers are entering a candidates' market. But Stetler said he’s feeling some of the love: He landed some supply-chain-related job interviews in the past week.

Carroll is casting a wide net, applying to Peloton-adjacent jobs as well as jobs in media production. Murphy had been planning on using his Peloton wages to go back to school in the fall. He’s reevaluating those plans now. The two said the St. Louis warehouse workers are still in touch, helping each other find opportunities.

“We have the same needs because obviously, we worked the same job,” Carroll said. “We lived the same sorts of lifestyles for a while so we may as well look out for each other.”

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