• Peloton, a connected bikes, treadmills, and fitness mirrors manufacturer, has announced plans to stop in-house production of fitness equipment and instead solely rely on third-party manufacturing partners, to streamline its operation and minimize costs.

• Accordingly, its in-house production carried out by Tonic Fitness Technology, a Peloton subsidiary in Taiwan, will now come to a halt. The company will move all of its bike and treadmill production to its existing Taiwanese partner Rexon Industrial, which was already manufacturing a proportion of its equipment.

• Peloton’s change in manufacturing strategy will lead to about 570 employees being laid off from Tonic facilities in Taiwan, with around 100 existing employees retained to work with its outside partners to support manufacturing. 

<ul><li> Analyst QuickTake: Peloton once had plans to strengthen its in-house production, with a new factory to be built in Ohio as well. However, the company canceled its Ohio plans earlier this year and has now ceased in-house production fully. In February, Peloton announced layoffs affecting approximately 2,800 jobs (20% of corporate positions) amid Peloton’s lowered demand and increasing losses.</ul>