Peloton is laying off nearly 3,000 employees but its instructors — who reportedly can make more than $500,000 a year — are safe

• Peloton is laying off 2,800 corporate employees but its instructors are safe.
• Senior Peloton instructors are paid more than $500,000 a year, according to Bloomberg.

Peloton is laying off more than 2,800 employees in a restructuring plan — but its instructors are safe from the axe.

The layoffs were announced on Tuesday as part of a restructuring plan on the back of falling demand for Peloton's home fitness products as pandemic restrictions ease. The job cuts started on the same day.

Peloton will be offering a "meaningful cash severance allotment" and extending equity vesting periods for those laid off. It is also offering them a free one-year Peloton subscription, according to the company's press release.

Not all employees are affected. "Peloton's roster of instructors and breadth and depth of its content will not be impacted by the initiatives announced today," the company said in its Tuesday news release.

The retention of instructors appears to be in line with Peloton's new business model. The new direction puts instructors at the heart of the company, as Bloomberg reported in January.

Some Peloton instructors have obtained celebrity status with huge followings. Head instructor Robin Arzon has almost one million Instagram followers. Meanwhile, fellow instructor Cody Rigsby, who was the second runner up in "Dancing with the Stars" last year, has garnered 1 million Instagram followers. The two, alongside instructor Ally Love, have a collaboration with sportswear giant Adidas.

Peloton's instructors — recruited by talent agents — are full-time employees with a fixed salary and incentive compensation, per Bloomberg. Senior instructors are paid more than $500,000 a year, Bloomberg reported, citing people familiar with the company. That's about 12 times more than the $40,510 annual median salary for fitness trainers and instructors, according to the Bureau of Labor Statistics.

There are currently 55 instructors listed on Peloton's website. They lead a range of classes from biking to yoga.

Peloton's job cuts amount to some 20% of its 14,000-strong corporate workforce. The cuts are expected to contribute to savings of at least $800 million a year, the company said in its news release. It's also winding down the building of a $400 million factory in Ohio where it had planned to produce bikes and treadmills.

As part of the shakeup, cofounder John Foley is stepping down as CEO and will become executive chair, Peloton said. The company is now tapping Barry McCarthy, a former chief financial officer at Spotify and Netflix, to head the company.

Peloton did not immediately reply to Insider's request for comment.