Thursday, February 10, 2022

Peloton’s dubious severance package

Facing the consequences of some poor business decisions and an uncertain future, Peloton made the difficult decision to lay off approximately 20 percent of its workforce, totaling 2,800 employees. 

Perhaps worried about the public relations storm this news would create (and further damage to its already diminished stock price), John Foley, Peloton's now-former President and CEO, and the company's co-founder, took to the company's website to explain the decision. Part of that explanation was an outline of the severance packages being offered to those impacted by the layoff.

  • Cash Compensation: We will be offering a meaningful cash severance allotment to impacted team members, based on job level and tenure with Peloton.
  • Equity: We’ll be extending equity vesting periods for team members through the end of February.
  • Healthcare: We'll extend healthcare coverage for those currently enrolled in our benefits, as well as benefits through LYRA, for a period of time.
  • Career Services: We’re offering career services through RiseSmart, a leading third-party vendor. This includes transition services, dedicated 1:1 sessions, a Certified Resume Writer, Job Leads, and Career Tools. Through this vendor, we’ll also be providing the option to voluntarily opt-in to a talent directory, which will showcase our incredible talent to leading employers.
  • Membership: The Peloton monthly membership will be complimentary for impacted team members for an additional 12 months.

Peloton, you lost me at one year of free service. Why did Peloton think a free year was a good idea to include in a severance package? As someone eloquently asked on Twitter, will the employees' exes who dumped them also be running the classes during that year. 

Some employees' mileage might vary. Some might have drunk so much of the Peloton cool-aid that even after being fired they will still appreciate biking on the company's dime for a year. But my guess is that most ex-Peloton employees won't want the reminder of their recent unemployment resting in their house and staring them in the face. Indeed, some ex-Peloton employees have already told the company that they'll have to sell their Peloton apparel to pay bills. Even giving Peloton the benefit of the doubt, it's offer is pretty darn tone-deaf.

Losing a job is an awful experience. As employers, we need to try to do better to understand the trauma we are causing, and to stop doing things that will exacerbate it. 

* Image by Tony Webster [CC BY 2.0], via Flickr