Peloton will slash stores, close its North American warehouses and lay off nearly 800 employees, adding to the thousands of people it laid off earlier this year amid a post-lockdown slump.

The New York City exercise equipment company announced the move last week via a memo from CEO Barry McCarthy, CNBC reported. According to the memo, the company plans a "significant and aggressive" paring of its 86 stores as well as elimination of its North American field ops warehouses.

"We will provide future updates on which operations will be impacted by this decision in the coming months," McCarthy wrote. "We do not anticipate closing retail locations in calendar 2022, but the timing is uncertain as we begin negotiations to exit our store leases."

In the memo, McCarthy outlined the company's latest progress on an $800M restructuring plan, saying that it is under "considerable cash flow pressure" as it tries to acquire a $750M bank loan.

As it eliminates warehouses, McCarthy said Peloton will expand its work with third-party logistics providers, also reducing delivery workers. McCarthy stated in the memo that this is intended to reduce per-product delivery costs by 50%. In July, Peloton said it would outsource manufacturing to Rexon Industrial Corp. in Taiwan.

Former Peloton workers wrote on social media over the weekend that they found out they had been laid off when they were locked out of system access.

"Woke up Friday morning to multiple text messages from my colleagues expressing concern when they were not able to log into their systems," Joseph Ocasio, a former hardware and software team lead at Peloton, wrote on LinkedIn. "When I tried to log in myself, I realized that I was also locked out. At first, I thought there may just be temporary service disruption. As the day progressed, the layoffs in February entered my mind, and reality set in."

Peloton has chewed on closing stores and cutting other expenses since January amid poor stock performance. The company laid off 2,800 employees, or about 20% of its workforce, in February.

"These changes are essential if Peloton is ever going to become cash flow positive. Cash is oxygen. Oxygen is life. We simply must become self-sustaining on a cash flow basis," McCarthy wrote.

Peloton's sales of luxury stationary bikes and treadmills soared during early pandemic lockdowns, but the company has slumped since gyms reopened. Though it is now mandating workers come back to the office in a hybrid model, Peloton threw 100K SF of its New York headquarters up for sublease in June.

"Peloton's executives believed — as many did — that behavioral changes in the pandemic would stick," Timothy Hubbard, assistant professor of management at the University of Notre Dame's Mendoza College of Business, told CBS in an email. "That does not appear to be the case as we see people reverting to their pre-pandemic routines."