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Peloton Interactive said it would stop making its own exercise bikes and treadmills, as the company races against time to overhaul its business model and lower overhead.

New York-based Peloton's decision to outsource manufacturing to a Taiwanese partner comes a year after the company completed a $420 million acquisition of an exercise equipment maker with factories in North Carolina and Washington.

CEO Barry McCarthy said the shift will help Peloton with “variablizing” costs and reducing cash burn while freeing the company to focus on technology and online exercise classes. McCarthy replaced founder John Foley in February after the company struggled to adapt to the reopening of gyms and fitness clubs after COVID-19 pandemic closures.

Initial reaction to Peloton’s new strategy was positive. Its share price rose by nearly 4% Tuesday afternoon after the stock closed at a new low Monday of $8.92. The pandemic darling’s market value, once $50 billion, has shriveled to less than $4 billion.

Peloton warned in May that it was “thinly capitalized,” or low on cash, after reporting a quarterly net loss of $757 million amid a 25% drop in sales. The company borrowed $750 million in order to give it time to transform its business. It has let go of nearly 3,000 employees.

McCarthy said in May that Peloton would turn into a digital-services provider that collects subscription revenue. He pledged the company would generate positive free cash flow next year.

Peloton lowered the cost of its bikes by $300, to $1,195, and reduced treadmills by $150, to $2,345. But famously loyal Peloton users seem irked that the cost of a monthly subscription rose to $44 from $39.

A survey by Evercore ISI found that 67% of Peloton users were “very or somewhat likely” to cancel their subscription as a result. Landing new customers could be tough because only 9% of survey respondents said they were “very likely” to be in the market for at-home gym equipment in the next 12 months.

“Consumer demand trends are soft,” Evercore analyst Shweta Khajuria said in a client report last month.