Peloton announced on Tuesday that it is replacing its CEO John Foley, while it plans to lay off about 20% of its corporate staff globally to cut costs for the flailing company.
Barry McCarthy, former chief financial officer of Spotify and Netflix, will be the fitness company’s new CEO, effective Wednesday. Foley, who co-founded Peloton, will stay as the company’s executive chair.
Peloton will also slash some 2,800 employees and cut production plans as its sales begin to wane. Demand for the company’s at-home workout equipment, including its famous stationary bike, has dropped as pandemic restrictions in the U.S. have eased and gyms are reopening.
Peloton will also scale back its distribution teams. But its on-camera instructors and class content will not be impacted, Foley said in a letter to shareholders.
“These decisions, particularly those related to our impacted Peloton team members, were not taken lightly,” Foley said. “We greatly value the contributions of our talented colleagues and are committed to supporting impacted team members in their transitions.”
Peloton performed well during the pandemic as lockdowns created strong demand for at-home fitness products and classes, but its stock fell 75 percent from last year’s highs. Foley admitted that this was partly due to “missteps” made and over investing in some areas of the business.
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