Peloton shares rose nearly 12% Friday after the company said it’s resetting its production levels and considering layoffs in order to make its business more “flexible.”

Chief Executive John Foley sent a memo to workers late Thursday that was also posted publicly, after CNBC reported earlier in the day that Peloton was temporarily halting production of its cycles and treadmills. Separately, CNBC reported Tuesday that Peloton has been working with McKinsey & Co. to look for areas to cut costs.

“We’ve found ourselves in the middle of a once-in-a-hundred year event with the COVID-19 pandemic, and what we anticipated would happen over the course of three years happened in months during 2020, and into 2021,” Foley said in the memo.

“We feel good about right-sizing our production, and, as we evolve to more seasonal demand curves, we are resetting our production levels for sustainable growth,” he added.

Foley said rumors that the company is halting “all production” are false.

CNBC obtained internal documents that outlined a plan at Peloton to pause Bike production for two months, from February to March. The documents suggest it already halted production of its more expensive Bike+ in December and will do so until June. Under the plan in the documents, Peloton wouldn’t manufacture its Tread treadmill machine for six weeks, beginning next month. And it would not produce any Tread+ machines in fiscal 2022, according to the documents. Peloton had previously halted Tread+ production after a safety recall last year.

Peloton declined to comment on those details. In his memo, Foley said the media was lacking context on Peloton’s plans.

Regarding job cuts, Foley said that Peloton is currently evaluating its organizational structure and the size of its team. “We are still in the process of considering all options as part of our efforts to make our business more flexible,” he wrote.

On Thursday evening, Peloton preannounced its financial results for the three-month period ended Dec. 31 and said it sees revenue coming in a previously forecast range. However, the company added fewer subscribers in the latest period, than it had expected.

Shares shed nearly 24% in trading Thursday, hitting an intraday low of $23.25. Even with Friday’s gains, the stock closed at $27.06, which means Peloton shares remain below its IPO price of $29.

Loop Capital Markets analyst Daniel Adam said in a note to clients on Thursday evening that even if Peloton didn’t have any equipment to sell in the future, “the subscription business alone is worth substantially more than the current market value of the company.”

Peloton counted 2.49 million connected fitness subscribers at the end of the fiscal first quarter. Those are people who own a Peloton product, such as its Bike+ or Tread, and also pay a monthly fee to access Peloton’s digital workout content. 

Adam has buy rating on the shares and a $90 price target.

Separately, BMO Capital Markets analyst Simeon Siegel lowered his price target on Peloton shares to $24 from $45. Siegel notably has maintained the lowest target among the analysts who cover the company.

“Peloton lies at the edge of an important precipice; a material strategic reset is likely required to stem meaningful cash-burn and faltering demand,” Siegel said in a research note Thursday evening. “Yet, improved profitability demands sacrificing revenue. Connected fitness is in its infancy, yet we believe Peloton estimates still appear too high.”

“We worry the bad news is not yet fully priced in and the path to recovery remains long,” he added.

At least eight analysts had trimmed their Peloton price targets by Friday morning.

Read the full memo that Peloton CEO John Foley sent to employees here.