Peloton is replacing its CEO and losing about 2,800 jobs among other cost-cutting measures, according to a press release issued by the company. The job cuts amount to around 20 percent of the former pandemic darling’s corporate workforce, but will not affect the company’s lauded roster of instructors or fitness content. The news was first reported by the Wall Street Journal.
Peloton hopes the changes will boost profitability after waning demand for its connected fitness equipment have made it an acquisition target, with Amazon, Nike, and even Apple named as possible suitors. The company, once valued at $50 billion, plunged to around $8 billion last week before takeover rumors began to swirl.
Once valued at $50 billion, it plunged to around $8 billion last week
Peloton co-founder John Foley is being replaced as CEO by Barry McCarthy, the former CFO of both Spotify and Netflix. Foley will become executive chair.
“I have always thought there has to be a better CEO for Peloton than me,” Foley told the WSJ. “Barry is more perfectly suited than anybody I could’ve imagined.”
Responding to rumors that the company was for sale, Foley said, “we are open to exploring any opportunity that could create value for Peloton shareholders.” Foley controls 80 percent of Peloton’s voting power so any deal would require his support.
Peloton’s other cost-cutting measures include winding down the $400 million factory it was building in Ohio, and a reduction in delivery teams and warehouse space allowing it to cut costs by nearly $1 billion this year.