During the COVID-19 pandemic, stationary bike company Peloton has been the talk of the town, allowing its customers to stay fit from the comfort of their homes.
But once people started getting out into the world again to go to gyms and ride bikes outside, the company began to struggle, a problem that has continued since then. company stock declined by approximately 30 percent In 2025 alone, more than 100,000 customers decided to disengage.
In an unexpected move, Peloton announced a lucrative pivot to AI last year to inject some much-needed excitement amid the recession. (The company also used new technological injections to justify significant price increases to customers.)
A new line of AI devices, including cameras tracking your every move, was somehow even more expensive than the already quite expensive lineup of exercise equipment. sales off to a bad start Late last year, it showed that consumers were not flocking to stores to buy stationary bikes with AI-enabled cameras.
And the shocking thing is that doubling down on AI by the company has not brought any benefit. As bloomberg reportsThe company cut its workforce by 11 percent this week as part of an ongoing effort to save $100 million. The goal is to optimize spending by reshaping “our teams and, in some cases, the locations where we work,” a spokesperson told the outlet.
It’s the latest sign that companies’ huge investments in AI aren’t even close to paying dividends. While many companies have argued that AI could take over the work of those stuck with layoffs, we have yet to find any solid evidence for that conclusion, which suggests this is more an excuse to implement austerity measures than actual AI automation. Case in point, a study published last year by MIT researchers found that 95 percent of efforts so far to incorporate generic AI into business have failed to generate “rapid revenue acceleration.”
And it’s not just Peloton laying off employees. Other companies including Amazon, metaAnd pinterest — all of which have made large investments in AI — have recently announced plans to cut significant portions of their workforce, signaling even more troubling days to come.
Whether implementing major price increases and offering more expensive hardware will add any needed investor enthusiasm for Peloton is still unclear. according to bloombergAnalysts are already concerned about rising prices scaring away customers, especially as the cost of living continues to rise.
Meanwhile, Peloton users have long been feeling like the company doesn’t value them, leading to device sales steadily doubling and prices rising.
One Reddit user said, “They built up to a surge in the pandemic and then acted like it was never going to end.” wrote In response to the latest news. “The product still works, and the trainers are still attracted. The issue is that they keep behaving like a hardware company instead of what they really are, which is a subscription and content platform.”
“They should stop chasing hardware volume and casual users and double down on the people who actually use the platform!” The user added. “Electricity is the user base.”
More on Peloton: Peloton announces AI boost, raises prices
