Peloton is replacing its CEO and cutting around 2,800 jobs
With its stock plunging 80 percent in a year, it's been a subject of takeover rumors.
Peloton grew massively during the COVID-19 pandemic, but now that things are opening up, it has struggled to maintain growth. Now, the company is shaking things up by replacing its CEO, overhauling the board and laying off around 20 percent of its corporate workforce, according to The Wall Street Journal. At the same time, "Peloton's roster of instructors and breadth and depth of its content will not be impacted by the initiatives announced today," the company said in a press release.
CEO and co-founder John Foley is stepping down as CEO to become executive chairman and will be replaced by former Spotify COO Barry McCarthy, the company told the WSJ. McCarthy will reportedly bring his understanding of content-driven subscription models to Peloton. "I have always thought there has to be a better CEO for Peloton than me," said Foley said. "Barry is more perfectly suited than anybody I could’ve imagined." On top of that, the company is cutting around 2,800 corporate positions.
On top of its financial struggles, Peloton has been hit by bad press over equipment safety, unpaid employees and even not-so-positive mentions in recent TV shows. With the value of the company tumbling from a peak of $50 billion to around $8 billion last week, it has been a subject of takeover rumors from the likes of Amazon, Nike and even Apple.
Peloton will discuss its plans to deal with the crisis in more detail when it reveals its second quarter results later today. It's expected to cut $800 million in costs and stop development of its $400 million Ohio factory, among other changes. In January, the company reported $1.14 billion of preliminary Q2 revenue and said it had 2.77 million subscribers. Its earnings call is set today at 5:00 PM ET.
Update 2/8/2022 9:10 AM: The article has been updated with information from Peloton's press release.
