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A Peloton exercise bike is seen after the ringing of the opening bell for the company's IPO at the Nasdaq Market site in New York City, New York, on Sept. 26, 2019.SHANNON STAPLETON/Reuters

Peloton Interactive Inc’s PTON-Q chief executive said on Thursday the company was reviewing the size of its work force and “resetting” production levels, following a report earlier in the day that it was temporarily halting production of connected fitness bikes and treadmills after a significant drop in demand.

Shares in the exercise bike maker, once a pandemic darling, closed down 24% at about $24, wiping off nearly $2.5 billion in market value.

“We now need to evaluate our organization structure and size of our team,” CEO John Foley said. “And we are still in the process of considering all options … to make our business more flexible.”

According to the CNBC report, Peloton, in a confidential presentation dated Jan. 10, said it had seen a “significant reduction” in demand and that it planned to pause bike production in February and March. It also won’t manufacture the Tread treadmill machine for six weeks, beginning next month.

“Rumors that we are halting all production of bikes and Treads are false,” Foley said.

Peloton earlier in the day said it was taking “significant corrective actions” to improve its profitability and estimated second-quarter revenue to be about $1.14 billion, compared with its previous forecast of $1.1 billion to $1.2 billion.

The company has seen a slump in demand for its fitness classes and equipment as people venture out of their houses to hit gyms again following gradual easing of pandemic-related curbs.

“During the pandemic, there was too little supply to meet the growing demand. Unfortunately, the company took those cues to bulk up supply just as demand began to falter,” BMO Capital Markets analyst Simeon Siegel said.

Peloton has been working with consulting firm McKinsey & Co for a review of its cost structure and could cut jobs, CNBC reported earlier this week.

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