According to internal documents, Peloton Interactive (PTON  ) is reportedly pausing production of its at-home fitness products. Peloton has since attempted to dismiss the rumors, though, without overtly contesting them.

"We have always done our best to share news with you all first, before sharing with the public," Peloton Co-Founder and CEO John Foley wrote. "This week, we've experienced leaks containing confidential information that have led to a flurry of speculative articles in the press. The information the media has obtained is incomplete, out of context, and not reflective of Peloton's strategy."

That confidential information, according to CNBC, were presentations and other documents indicating that the company was experiencing shrinking demand for its products. Peloton benefitted immensely during the initial outbreak of the coronavirus pandemic, which drove many consumers indoors and drove up demand for exercise products. However, as consumers have pushed to return to some semblance of normalcy, that demand has shrunk considerably, with many Americans re-enrolling at gyms.

Peloton had expanded its production capacity considerably during the pandemic, having experienced issues keeping up with demand at first. The company didn't throttle down as demand waned, and according to its internal documents, Peloton has been left with a considerable backlog of unsold inventory.

While Peloton attempted to dismiss the rumors, it hasn't exactly done so by walking them back. The company admitted to "adjusting" its production volume, though without providing any clarification.

However, a critical piece of information not in the initial reports that Foley revealed was that Peloton would also be facing layoffs. While there had been comments by Peloton executives about layoffs being a "last resort," it would appear that the company is in enough of a bind to consider it. This comes after Peloton hired McKinsey to help it restructure and streamline operations.

For investors of Peloton, things don't look to be getting much better for the company's still declining valuation. Thursday started flat, with Peloton dropping 24% in the afternoon following initial reports of its pause. On Friday, there was some recovery, with shares rising 11.8% before trading stopped for the weekend.