Layoffs. Losses. Plunging share prices. These pandemic winners are now struggling

Aug 28, 2022, 11:00 AM
Zoom was one of the biggest beneficiaries of the pandemic, how are they doing since? (PHOTO: CNN)

 (CNN) — Few companies flourished more amid the pandemic’s economic upheaval than Peloton.

With people unable (or unwilling) to go to the gym, consumers rushed to buy its exercise equipment and, more importantly, sign up for its online classes. Peloton posted its first quarterly profits in calendar year 2020 as revenue jumped 139% and the stock soared 434%.

The boost was short-lived. As gyms reopened and class subscriptions and equipment sales plunged, so did the company’s outlook.

Thursday, after posting a worse-than-expected fiscal fourth quarter loss, Peloton CEO Barry McCarthy wrote in a letter to investors that “naysayers will look at our Q4 financial performance and see a melting pot of declining revenue, negative gross margin, and deeper operating losses. They will say these threaten the viability of the business.”

McCarthy, however, sees great things ahead for the company despite its woes, claiming that Peloton has made significant progress in its turnaround efforts and stemming its rate of burning through cash.

Investors don’t share his faith. Shares have lost more than 90% of their value since the end of 2020, and are now worth less than half of what they were at the beginning of that year.

Peloton is hardly the only pandemic winner to recently turn into a post-pandemic loser. Numerous companies that convinced themselves — and investors — that they were well positioned to keep growing once Covid retreated have been proven wrong.

Here are some other studs of 2020 that have become duds in 2022.


The pandemic forced people to stay home, and in millions of cases, to start working from there. Many took the money they were saving by not commuting or vacationing to buy furnishings and other items to spruce up their homes.

That home goods buying binge has come to a crashing halt. Consumers have shifted their buying priorities, especially amid sky-high prices for essentials such as food and gasoline that have forced many households to cut back on nonessential purchases. Now, any such purchases are more likely to be for things like long-delayed travel plans rather than more stuff.

The shift in spending has hit a wide range of retailers, including giants such as Walmart and Target. But perhaps the poster child for companies reeling from this shift is online home goods retailer Wayfair, which just announced it is cutting 5% of its staff. In making the announcement, the CEO admitted the company had been way too optimistic about its ongoing growth potential.

“We’ve grown Wayfair significantly to keep pace with the e-commerce growth in the home category. We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth,” said CEO Niraj Shah in a letter to staff announcing the layoffs. “This year, that growth has not materialized as we had anticipated. Our team is too large for the environment we are now in, and unfortunately we need to adjust.”

It’s not just that the company isn’t growing as fast as it had been. Like Peloton, Wayfair has shifted into reverse and into red ink. Revenue in the first six months of this year is down 14%, and it just reported a $697 million net loss compared to a $149 million profit in the same period of 2021.

Wayfair stock, which soared 482% between the end of March of 2020 and the end of March 2021, has essentially given up all of those gains.


The Canadian software firm that helps retailers sell online was also a huge winner when companies were forced to pivot to e-commerce because of the pandemic. Last month its founder and CEO announced Shopify was cutting 10% of its staff because its ongoing growth “bet didn’t pay off.”

“Shopify has always been a company that makes the big strategic bets our merchants demand of us — this is how we succeed,” CEO Tobi Lutke wrote in a memo to staff announcing the layoffs.

The company’s pre-Covid e-commerce growth had been steady and predictable, he said, but the early days of the pandemic brought a never anticipated spike in sales.

“Was this surge to be a temporary effect or a new normal? And so, given what we saw, we placed another bet: We bet that the channel mix — the share of dollars that travel through e-commerce rather than physical retail — would permanently leap ahead by five or even 10 years,” he said. “We couldn’t know for sure at the time, but we knew that if there was a chance that this was true, we would have to expand the company to match.”

The good times didn’t evaporate quite as quickly as they did for some of the other pandemic winners. But they have certainly receded.

While revenue is up 18% in the first six months of the year compared to the prior year, Shopify’s costs, including for research and development, have nearly doubled. The company also suffered a $1 billion paper loss on its equity investments in the second quarter, causing it to swing to a $2.7 billion net loss for the period from a $2.1 billion profit a year earlier.

The company’s stock continued to hold up through 2021 but is down 75% so far this year.


The online meeting platform isn’t facing the same challenges as some of the other erstwhile pandemic winners. Millions of people are still working remotely, at least part of the time, and Zoom is still profitable. But earnings have plunged 71% in the first half of this year because of increased costs. The company has been beating profit forecasts, and its share price is still just above pre-pandemic levels.

Zoom did report weaker-than-expected revenue this week and gave an outlook that disappointed investors, sending shares down 17% on the day the company reported results.

For the year Zoom shares are off 56%, and are down 86% since their peak in late October 2020, when the pandemic was raging and there were no widely available vaccines.

Some blame for the slide can be laid at the feet of investors, who got ahead of themselves and drove the price of the stock up 765% between the end of 2019 and its peak 10 months later.

Plus, every bit of good news about beating back Covid was taken as bad news for Zoom: Shares plunged 25% in the two days following the news of Pfizer’s success in clinical trials for a Covid vaccine in November 2020.


Netflix was plenty successful long before anyone heard of Covid-19. Even in the face of increased streaming competition, the platform had a successful 2019, as two original films, Martin Scorsese’s “The Irishman” and Noah Baumbach’s “Marriage Story,” attracted both viewers and best picture nominations. “The Crown” returned for a third season with a new cast.

With that lineup, Netflix shares gained 21% during the course of 2019, as its revenue rose 28%. The service added 27 million subscribers globally during the year.

But things really kicked into gear with the pandemic lockdowns. Netflix added 16 million subscribers in the first three months of 2020 and ended the year topping 200 million subscribers for the first time.

Netflix shares also skyrocketed, more than doubling in value from the start of 2020 to a record high of $691.69 in November 2021.

But competition has increased. In the first quarter of this year the company lost 200,000 subscribers globally, the first drop in subscribers in a decade, and nowhere near the 2.5 million gain it had previously forecast. In the second quarter it lost another 970,000.

The company has also been losing investor support. Netflix shares have lost nearly two-thirds of their value year-to-date, although they have rebounded from a 12-month low in May when investors were bracing for even deeper subscriber losses.

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Layoffs. Losses. Plunging share prices. These pandemic winners are now struggling