Hi! The lucky individual who's in line to scoop $1.34bn from the Mega Millions lottery still hasn’t stepped forward to claim their jackpot after a month. With that sort of money you’d never have to work — or spend your days #quietquitting — again. Today we explore:
High-end fitness equipment company Peloton scored a big victory this week, announcing a deal with Amazon that sent the company's share price up some 20% on Wednesday. Unfortunately, like the day after a really long cycle, the pain soon set in for Peloton as they then released a quarterly earnings report that revealed a $1.2bn loss.
We should sell... fewer bikes?
Among the many alarm bells in the report, the one ringing loudest of all is that Peloton is now losing money on what used to be its core business: selling fitness equipment. The company reported that it had "cut hardware prices in order to sell inventory ... despite selling that hardware at a negative gross margin".
That means the company is leaning heavily on its subscription business — where users pay monthly for access to live workouts, leader boards, advanced tracking and a library of fitness content.
Last quarter, Peloton counted more than 131 million workouts from the company's Connected Fitness subscribers. In total that was down only 2% on the same time last year, but on a per-user basis it was a major drop-off in engagement — last year in Q4 each Pelotonian averaged some 20 workouts per month, this year that number was closer to 15.
Peloton's new CEO is now hyper-focused on bringing the company back into the black. Giving up some control of its distribution, by partnering with retailers like Amazon, may mean even lower margins on its equipment sales, but if it gets more users signed up to a recurring high-margin subscription it may just help the wheels from coming off completely.
Forgive and forget
President Biden's announcement this week that up to $10k of outstanding student debt per person will be forgiven is an historic — although divisive — moment.
As our coverage back in April showed, federal student loan debt in America has ballooned in recent decades to around $1.6 trillion — more than what is owed by American consumers on car loans and credit cards.
Estimates suggest that Biden's debt cancellation could cost somewhere around $300bn, equivalent to roughly 19% of all outstanding student loans. Student debt is split amongst more than 46 million Americans, with a pretty wide-range of outstanding balances. Data from the Dept. of Education (via NBC) shows that just shy of 15m people owe less than $10k, and will therefore be debt-free if they earn under the $125k threshold.
Biden’s announcement has been warmly welcomed by some factions, with many keen to praise the particularly progressive $20k write-off clause for students who received Pell Grants (those who required the most financial assistance). However, the costly policy has been a source of controversy as well as celebration, with critics arguing that the debt-canceling outlay is a voter-bribe, wasteful, plain old unfair or a risk to higher inflation.
One of the hottest topics on social media in the last few weeks has been "quiet quitting", with videos using just one associated hashtag racking up nearly 40 million views on TikTok.
The movement — often exclusively ascribed to Gen Z and younger Millennial employees — is a pretty broad church, though all participants push a rejection of hustle culture. Quiet quitting embodies the idea that you should do your explicit job description, and your explicit job description only, in the workplace.
Despite being relatively contained to social media, the idea has provoked numerous think pieces from major publications on the subject and, of course, some backlash.
Work to live
Quiet quitting follows on from "antiwork" — another online movement that aims to push back against corporate culture. On the forum r/antiwork, which gained traction over the pandemic and now has more than 2.1 million users, redditors discuss negative experiences with bosses, the modern labor force and capitalism more generally.
With average wage rises falling behind inflation, many employees appear to be re-evaluating their place in the working world — at least on TikTok and reddit.
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